Congressional Intervention in the Administrative Process: Legal and Ethical Considerations

Congressional research reportSep 25, 2003

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Congressional Intervention in the

Administrative Process: Legal and Ethical

Considerations

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Legislative Attorney

September 25, 2003

Congressional Research Service

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RL32113

CRS Report for Congress

Prepared for Members and Committees of Congress

Congressional Intervention in the Administrative Process

Summary

When congressional committees engage in oversight of the administrative bureaucracy, or when

Members of Congress intervene in agency proceedings on behalf of private constituents or other

private entities with interests affecting the Members’s constituency, such interventions involve

varying degrees of intrusion into agency decisionmaking processes. This report will briefly

examine the currently applicable legal and ethical considerations and standards that mark the

limits of such intercessions.

The report initially reviews the judicial development and application of standards for determining

whether congressional pressure or influence will be deemed to have tainted an agency

proceeding. It concludes that the courts, in balancing Congress’s performance of its constitutional

and statutory obligations to oversee the actions of agency officials against the rights of parties

before agencies, have shown a decided predilection for protecting the congressional prerogatives.

Thus where informal rulemaking or other forms of informal decisionmaking are involved, the

courts will look to the nature and impact of the political pressure on the agency decisionmaker

and will intervene only where that pressure has had the actual effect of forcing the consideration

of factors Congress did not intend to make relevant. Where agency adjudication is involved a

stricter standard is applied and the finding of an appearance of impropriety can be sufficient to

taint the proceeding. But even here the courts have required that the pressure or influence be

directed at the ultimate decisionmaker with respect to the merits of the proceeding and that it does

not involve legitimate oversight and investigative functions, before they will intervene.

The report next examines the conduct of Members of Congress and their staffs intervening in

administrative matters from the perspective of ethics and conflict of interest rules, statutes and

guidelines bearing upon a Member’s and staffer’s official duties. It notes that since congressional

intervention and expressions of interest in administrative matters from a Member’s office are

recognized as legitimate, official representational and oversight functions and duties of Members

of Congress, the primary focus of the ethical and statutory conduct restraints is limited to(1) any

improper enrichment or financial benefit accruing to the Member in return for, or because of, his

or her official actions and influences, including the receipt of gifts or payments, or existing

financial interests in, or relating to the matter under consideration; and (2) any overt coercion or

threats of reprisals, or promises of favoritism or reward to administrators from the Member’s

office which could indicate an arguable abuse of a Member’s official representational or oversight

role. Additionally, ethical guidelines in Congress incorporate an “appearance” standard for

Members which would counsel a Member to adopt office procedures and systems which would

prevent an appearance of a “linkage” between interventions and the receipt of things of value,

particularly legitimate campaign contributions, and which would assure that decisions to

intervene are based on the merits of a particular matter.

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Contents

I. Introduction .............................................................................................................................1

II. Current Judicial Standards Governing Congressional Influence on Agency

Decisionmaking .......................................................................................................................2

A. The Nature of the Proceeding ...........................................................................................3

B. The Foundation Cases.......................................................................................................7

1. Pillsbury Co. v. FTC....................................................................................................7

2. D.C. Federation of Civic Associations v. Volpe ............................................................8

3. The Critique of Pillsbury and D.C. Federation .......................................................... 10

C. Adjudicatory Rulings Since Pillsbury ............................................................................. 11

1. Koniag v. Kleppe....................................................................................................... 12

2. Gulf Oil Corporation v. FPC ..................................................................................... 13

3. Peter Kiewit Sons’ Co. v. U.S. Army Corps of Engineers ............................................ 14

4. Power Authority of the State of New York v. FERC..................................................... 15

5. State of California v. FERC ....................................................................................... 15

6. ATX, Inc. v. U.S. Department of Transportation ......................................................... 16

D. Informal Decisionmaking Rulings Since D.C. Federation............................................... 18

1. American Public Gas Association v. FPC .................................................................. 18

2. Town of Orangetown v. Ruckelshaus.......................................................................... 20

3. Chemung County v. Dole ........................................................................................... 20

4. DCP Farms et al v. Yeutter........................................................................................ 21

E. Interference With Agency Rulemaking Proceedings ........................................................ 23

1. Texas Medical Association v. Mathews ...................................................................... 23

2. United States ex rel Parco v. Morris .......................................................................... 24

3. Sierra Club v. Costle ................................................................................................. 24

F. Influence That Could Abuse the Agency Investigatory Process ........................................ 27

1. SEC v. Wheeling-Pittsburgh Steel Corp. .................................................................... 27

2. United States v. Armada Petroleum Corp................................................................... 30

3. United States v. American Target Advertising, Inc. ..................................................... 31

G. Summary and Conclusions.............................................................................................. 31

III. Ethical Standards and Considerations .................................................................................. 36

A. House and Senate Guidelines.......................................................................................... 39

1. Opinion of the House Committee on Standards of Official Conduct ........................... 39

2. Senate Rule on Intervention....................................................................................... 40

B. Intervention and Receipt of Things of Value.................................................................... 41

1. Bribery...................................................................................................................... 41

2. Illegal Gratuities........................................................................................................ 42

3. Compensation/Conflicts of Interest............................................................................ 44

4. Extortion................................................................................................................... 45

5. Conspiracy to Defraud the Government ..................................................................... 45

6. Campaign Contributions and Interventions ................................................................ 48

7. Gifts.......................................................................................................................... 57

C. Personal Financial Interest in the Matter ......................................................................... 61

D. Conduct During Interventions......................................................................................... 64

E. Issues in Particular Intervention Contexts........................................................................ 68

1. Federal Employment and Personnel Matters .............................................................. 68

2. Federal Contracts ...................................................................................................... 70

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3. Judicial Intervention.................................................................................................. 71

F. Conclusions Concerning Ethical Issues............................................................................ 73

Contacts

Author Contact Information ...................................................................................................... 74

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I. Introduction

The inevitable tension between Congress and the Executive created by our constitutionally

mandated system of separated but shared powers has been the source of continual interbranch

conflict. One manifestation of this struggle occurs when congressional committees engage in

oversight of the administrative bureaucracy; another when Members of Congress attempt to

intervene in administrative proceedings on behalf of private constituents or other private entities

with interests affecting the Member’s constituency. Both such interventions involve varying

degrees of intrusion into agency decisionmaking processes. On relatively rare occasions these

interventions have resulted in court actions challenging the congressional intercession as

exertions of undue political influence on agency decisionmakers which violate the due process

rights of participants in the proceedings in question and impugn the integrity of the agency

decisional processes; or in disciplinary proceedings before ethics committees of either House

alleging that such Member actions violated institutional rules or other ethical standards. Such

challenges have arisen in the context of congressional intercessions into rulemakings,

ratemakings, informal decisionmaking, adjudications, and agency investigations that arguably

would lead to an adjudicatory proceeding.

Past high profile incidents raising questions regarding the legal and ethical propriety of

congressional exertions of influence on administrative decisionmaking have surprisingly

produced only a paucity of authoritative commentary on and analysis of the guiding principles

and standards applicable to the constitutional bases of the roles Members play when they act as

part of the committee oversight process or in their individual representative capacities. 1 This

report is designed to provide a contemporary overview of applicable guidelines and

considerations in the judicial and congressional forums. Toward that end, Part II reviews the

judicial development and application of standards for determining whether congressional pressure

or influence will be deemed to have tainted an agency proceeding. It concludes that the courts, in

balancing Congress’s performance of its constitutional and statutory obligations to oversee the

actions of agency officials against the rights of parties before agencies, have shown a decided

predilection for protecting the congressional prerogatives. Thus where informal rulemaking or

other forms of informal decisionmaking are involved, the courts will look to the nature and

impact of the political pressure on the agency decisionmaker and will intervene only where that

pressure has had the actual effect of forcing the consideration of factors Congress did not intend

to make relevant. Where agency adjudication is involved a stricter standard is applied and the

finding of an appearance of impropriety can be sufficient to taint the proceeding. But even here

With respect to judicial standards concerning the exertion of congressional influence, see Richard J. Pierce, Jr.,

Administrative Law Treatise, Vol. II, sec. 9.8, 675-79 (4th Ed. 2002) (Pierce Treatise) (courts should “recognize[] the

need to permit political oversight with respect to policy issues Congress has entrusted to agency decisionmakers.”);

Richard J. Pierce, Jr., Political Control Versus Impermissible Bias In Agency Decisionmaking: Lessons form Chevron

and Mistretta, 57 U. of Chic. L. Rev. 481 (1990)(same)(Political Control); Note, Judicial Restrictions on Improper

Influence in Administrative Decision-making: A Defense of the Pillsbury Doctrine, 6 J. of Law and Politics 135

(1989)(calling for imposition of “appearance of impropriety” standard in any agency proceeding involving

congressional intervention.); Block, Orphaned Rules in the Administrative State: The Fairness Doctrine and Other

Orphaned Progeny of Interactive Regulation, 76 Geo. L.J. 59 (1987)(“[M]embers of Congress should not be judicially

constrained in their efforts to communicate with agencies” during the informal rulemaking process.); Parnell,

Congressional Interference in Agency Enforcement: The IRS Experience, 89 Yale L.J. 1360 (1980)(“The power of

Congress to investigate the IRS is wide-ranging and may effectively be limited only by discretion and prudence.”);

Note, Judicial Limitation of Congressional Influence on Administrative Agencies, 73 Northwestern L. Rev. 931

(1979)(“When the source [of congressional influence] is an authorized committee investigation, no administrative

proceeding should be invalidated unless administrative bias as to adjudicative facts can be discerned.”)

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the courts have required that the pressure or influence be directed at the ultimate decisionmaker

with respect to the merits of the proceeding and that it does not involve legitimate oversight and

investigative functions before they will intervene.

Part III of the report examines the conduct of Members of Congress and their staffs intervening in

administrative matters from the perspective of ethics and conflict of interest rules, statutes and

guidelines bearing upon a Member’s and staffer’s official duties in this area. It notes that since

congressional intervention and expressions of interest in administrative matters from a Member’s

office are recognized as legitimate, official representational and oversight functions and duties of

Members of Congress, the primary focus of these ethical and statutory conduct restraints is

limited to(1) any improper enrichment or financial benefit accruing to the Member in return for or

because of his or her official actions and influences, including the receipt of gifts or payments, or

existing financial interests in, or relating to the matter under consideration; and (2) any overt

coercion or threats of reprisals, or promises of favoritism or reward to administrators from the

Member’s office which could indicate an arguable abuse of a Member’s official representational

or oversight role. Additionally, there are ethical guidelines in Congress incorporating broad

“appearance’ standards for Members which could raise ethical concerns in relation to the

acceptance of gifts, favors, donations, and benefits, including campaign contributions, by

Members from those who are directly affected by the Member’s official duties, even in the

absence of a showing of any corrupt bargain, express payment, or any direct connection to an

official act. While campaign contributions from private individuals to Members have a facial

legitimacy and necessity in our government and electoral system which other forms of monetary

transfers to legislators (such as gifts) do not, and may be treated differently, both Houses of

Congress advise members and staff to avoid any appearance of a “linkage” between campaign

contributions and interventions. Such guidance would counsel a Member to adopt office

procedures and systems for evaluating requests for assistance which would prevent any

appearance that interventions decisions are based upon the receipt of things of value, particularly

legitimate campaign contributions, and which would assure that decisions to intervene are, rather,

based on the merits of a particular matter.

II. Current Judicial Standards Governing

Congressional Influence on Agency

Decisionmaking

Support for claims that an exercise of congressional influence in an agency proceeding may serve

as basis for a challenge to the end product of that decisional process rest on two foundation cases,

a 1966 decision of the Fifth Circuit Court of Appeals in Pillsbury Co. v. FTC2 and a 1971 ruling

of the District of Columbia Circuit Court of Appeals in D.C. Federation of Civic Associations v.

Volpe,3 and a relative handful of judicial rulings since then which have grappled with the question

of whether particular instances of exertion of congressional pressure would serve to taint such a

proceeding. While this case law makes it clear that there are limits to congressional intercession,

whether those limits have been breached in a particular instance is often far less clear. Analysis

has been made difficult by the relative dearth of decisions and the reluctance of courts in those

354 F.2d 952 (5th Cir. 1966).

459 F.2d 1231 (D.C. Cir. 1971), cert. denied 405 U.S. 1030 (1972).

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cases to venture beyond the factual confines of the dispute. The absence of a congressional

spokesperson in most of the cases to present the legislative interest may also be a complicating

factor.

Close analysis of the apparently disparate and sometimes seemingly conflicting judicial decisions,

however, reveals a consistent underlying pattern that allows for rationalization of the holdings

and for the formulation of guidelines for application in future situations. The determinative

factors for the courts appear to be the nature of the proceeding involved, the impact the political

pressure had on the decisionmaker, and whether the object of the political intercession is to reflect

the views of members on issues of law and policy. This part of the report will examine the extant

case law to explicate the manner in which the courts are formulating the differing standards that

are applied to the various types of administrative proceedings and the underlying rationale for

their actions.

A. The Nature of the Proceeding

The law of undue influence is a still-evolving, difficult to define area of jurisprudence that does

not as yet yield ready answers when applied to particular complex and often politically charged

fact situations. The relatively small body of case law that has developed, however, reflects the

growing sensitivity of the courts to appearing to be engaging in unwarranted intrusions into the

political process.

Problems in this area are not subject to easy categorization or generalizations; case by case

evaluations have been the norm. However, the case law does provide broad guidelines within

which analysis may proceed: Where agency actions resembles judicial action, where it involves

formal or informal adjudication, or formal rulemaking, insulation of the decisionmaker from

political influence through public pressure or unrevealed ex parte contacts has been deemed

justified by basic notions of due process to the parties involved. 4 But where agency action

involves informal rulemaking of generally applicable policy, thus closely resembling the

legislative process, there is deemed to be far less justification for judicial intervention to protect

the integrity of the process5

In practice, however, these categorizations serve only as useful starting points for analysis. The

courts have eschewed mechanical application of these categories. That is, an agency proceeding

that has adjudicatory elements will not be pigeonholed automatically as a case requiring the

highest level of judicial scrutiny.6 Similarly, an informal rulemaking may not be reflexively dealt

with as a matter of pure policymaking and accorded extreme deference. 7 Rather, the courts appear

to be making their determinations in this area by ascertaining where on the

adjudication/policymaking continuum the proceeding falls and then applying the factors most

appropriate to that particular situation. 8 The task of analysis in such cases is thus threefold: (1)

E.g., Pillsbury Co. v. FTC, 354 F.2d 952 (5th Cir. 1966).

Sierra Club v. Costle, 657 F.2d 298, 400-01 (D.C. Cir. 1981).

See, e.g., Gulf Oil Corp. v. FPC, 563 F.2d 588 (3d Cir. 1977). Also compare Association of National Advertisers v.

FTC, 627 F.2d 1151 (D.C. Cir. 1979), cert denied 447 U.S. 421(1980)(hybrid rulemaking proceeding held legislative

nature).

Texas Medical Association v. Mathews, 408 F. Supp. 303 (W.D. Tex. 1976).

See Sokaogon Chippewa Community v. Babbitt, 929 F. Supp. 1165, 1174-76 (W.D. Wisc. 1996) (“[T]he propriety of

congressional contacts depends on the nature of the administrative proceeding”); Sierra Club v. Costle, 657 F. 2d 298,

(continued...)

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determination of the type of proceeding involved; (2) identification and application of the factors

relevant to that type of proceeding; and, if taint is involved, (3) determining the remedies that

may be available. The following discussion will treat each of these issues in turn. It seems useful,

however, to start with an overview and description of the distinguishing elements of the various

proceedings in the continuum as it moves from adjudication toward varieties of informal, nonrecord decisionmaking.

Administrative action pursuant to the Administrative Procedure Act (APA)9 is either adjudication

or rulemaking. The two processes differ fundamentally in purpose and focus and as a

consequence have imposed on them sharply divergent statutory and constitutional procedural

requirements. 10 Thus the APA defines “adjudication” as the “agency process for the formulation

of an order.”11 The term “order” is then defined as “the whole or part of a final disposition,

whether affirmative, negative, injunctive, or declaratory in form, of an agency in a matter other

than a rulemaking but including licensing.”12 A “rulemaking” is the “agency process for

formulating, amending, or repealing a rule.”13 Finally, a “rule” is defined to mean:

. . . the whole or a part of an agency statement of general or particular applicability and

future effect designed to implement, interpret, or prescribe law or policy or describing the

organization, procedure, or practice requirements of an agency and includes the approval or

prescription for the future of rates, wages, corporate or financial structures or reorganizations

thereof, prices, facilities, appliances, services or allowances therefor or of valuations, costs,

or accounting, or practices bearing on any of the foregoing.14

The definitive explanation of the interrelationship of these definitions and the dichotomous

scheme of the APA was provided the Attorney General in 1947.15

The object of the rule making proceeding is the implementation or prescription of law or

policy for the future, rather than the evaluation of a respondent’s past conduct. Typically, the

issues relate not to the evidentiary facts, as to which the veracity and demeanor of witnesses

would often be important, but rather to the policy-making conclusions to be drawn from the

facts . . . Conversely, adjudication is concerned with the determination of past and present

rights and liabilities. Normally, there is involved a decision as to whether past conduct was

(...continued)

400 (D.C. Cir. 1981).

5 U.S.C. 551 et seq. (2000).

Assoc. of National Advertisers, Inc. v. FTC 627 F.2d 1151, 1160-61 (D.C. Cir. 1979), cert. denied 447 U.S. 921

(1980).

5 U.S.C. 551 (7) (2000).

5 U.S.C. 551 (6) (2000). “Licensing” is defined to include “the agency process respecting the grant, renewal, denial

revocation, suspension, annulment, withdrawal, limitation, amendment, modification, or conditioning of a license.” 5

U.S.C. 551 (9)(1988).

5 U.S.C. 551 (5) (2000).

5 U.S.C. 551 (4) (2000).

Attorney General’s Manual on the Administrative Procedure Act 14 (1947). The manual is a contemporaneous

interpretation of the APA. Because of “the role played by the Department of Justice in drafting the legislation,” its

interpretation and explanations have been accorded significant deference by the courts. See Vermont Yankee Nuclear

Power Corp. v. NRDC, 435 U.S. 519, 546 (1978); Assoc. of National Manufacturers, Inc. v. FTC, supra footnote 6,

627 F.2d at 1160 n. 15.

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unlawful, so that the proceeding is characterized by an accusatory flavor and may result in

disciplinary action.16

In sum, then, rulemaking involves the formulation of a policy or interpretation which the agency

will apply in the future to all persons engaged in the regulated activity. Adjudication is the

administrative equivalent of a judicial trial. It applies policy to a set of past actions and results in

an order against (or in favor of) the named party. The focus of rulemaking is prospective. The

primary focus of adjudication is retrospective.

Administrative rulemaking and adjudication may be conducted pursuant to either informal or

formal procedures. Informal rulemaking requires the administrative agency, following publication

of a proposed rule in the Federal Register, to provide “interested persons an opportunity to

participate in the rulemaking through submission of written data, views or arguments.”17 Courts

reviewing such proceedings are required to uphold informal rulemaking decisions unless those

decisions are “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with

law. 18

Formal rulemaking is invoked when “rules are required by statute to be made on the record after

opportunity for agency hearing.”19 Under the APA, formal rulemaking must include a trial-type

hearing at which a “party is entitled to present his case or defense or oral or documentary

evidence, to submit rebuttal evidence, and to conduct such cross-examination as may be required

for a full and true disclosure of the facts.”20 Judicial review of formal rulemaking requires a court

to set aside a rule that is “unsupported by substantial evidence” on the record.21

Formal adjudication is governed by section 554 of the APA and arises in “every case of

adjudication required by statute to be determined on the record after opportunity for an agency

hearing.”22 Section 554 incorporates the procedural requirements of section 556 and 557 and

affords parties to a formal adjudication the right to present evidence and to conduct cross

examination.23 Judicial review of formal adjudication, like that of formal rulemaking, is governed

by the substantial evidence standard.

Informal adjudication occurs when an agency determines the rights or liabilities of a party in a

proceeding to which section 554 does not apply.24 The APA makes no provision for informal

adjudications—adjudications unaccompanied by the protections of an on the record, formal,

judicial-like trial. But since these informal adjudications involve individual rights rather than

issues of general policy, the courts have recognized they implicate constitutional due process

See also U.S. v. Florida East Coast Ry., 410 U.S. 224, 244-46 (1973).

5 U.S.C. 553 (c) (2000).

5 U.S.C. 553 (2) (A).

5 U.S.C. 553 (c).

5 U.S.C. 553 (d).

5 U.S.C. 706 (2)(E).

5 U.S.C. 554 (a).

5 U.S.C. 554 (b)-(d). Section 557(d) also prohibits ex parte contracts with or by anyone “who is or may be

reasonably expected to be involved in the decisional process” of an adjudicatory proceeding.

See, e.g. Camp v. Pitts, 411 U.S. 138, 140-42 (1973)(per curiam); Aircraft Owners and Pilots Assoc. v. FAA, 600

F.2d 965, 969-70 (D.C. Cir. 1979); United States Lines, Inc. v. FMC, 584 F.2d 519 (D.C. Cir. 1978).

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values. 25 Thus, although due process does not generally require a full scale judicial trial, informal

adjudications must nevertheless conform “with the notion of a fair hearing and with the principles

of fairness implicit in due process.”26 In such proceedings, the agency’s final decision is reviewed

under the APA’s arbitrary and capricious standard which requires a court to conduct a “searching

and careful” inquiry based upon “the full administrative record that was before the [agency

decisionmaker] at the time he made his decision.”27

It is important to note that informal decisionmaking, that is, governmental actions that are taken

without an evidentiary hearing and formal record, constitute by far the vast bulk of government

decisionmaking. As one commentator has noted:

... However defined, informal action is the mode in which government operates. A common

and loose figure is that ninety percent of the government’s business is accomplished by

informal action. The figure is much too low. In terms of quantity, surely much less than one

percent of the actions of the federal government are based upon evidentiary hearings. And, if

one were possessed of a divine calibrator that could measure “importance,” it is doubtful that

weighing the transactions by their importance would reduce the predominance of informal

action in the operations of government.28

As a consequence, this category of decisionmaking has been accorded special attention by the

courts.

A final important category of agency action that has been the subject of undue influence litigation

is investigation. Most administrative action, including much of that which occurs in an informal

as well as in a formal proceeding, is conditioned by information obtained through an agency’s

prior investigation. Administrative agencies do not have unrestricted power to demand

information merely for satisfying their curiosity. The agency’s command can be enforced only if

it is authorized by law and issued in a lawful manner. Additionally, constitutional limitations

hedge administrative power to investigate. Within these constraints, the courts have

acknowledged the importance of judicial deference to administrative agencies in conducting

investigations.29 Agency decisions to conduct investigations are deemed “committed entirely to

agency discretion”30 and are unreviewable except where they are made in “bad faith” and the

enforcement of the administrative process would be an abuse of the judicial process. 31

Vermont Yankee Nuclear Power Corp. v. NRDC, 435 U.S. 519, 542 (1978); Sierra Club v. Costle, 657 F.2d 298, 400

(D.C. Cir. 1981).

U.S. Lines v. FMC, 584 F. 2d 519, 539 (1978).

Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 416, 420 (1971); U.S. Lines v. FMC, supra footnote

26, 584 F.2d at 541-42.

Gardner, The Informal Actions of Government, 26 Amer. U. L. R. 799, 799-800 (1977). The types of administrative

decisions that may comprise the legal category of “informal actions” would include settlement, negotiation and

alternative dispute resolution; review and disposal of applications and claims for social welfare benefits, immigration

matters, etc.; test and inspection programs; suspensions, seizures and recalls; informal supervision (such as in bank

regulation); the use by agencies of publicity; and responses to requests for agency advice and declaratory orders, among

others. See, Ernest Gellhorn and Ronald M. Levin, Administrative Law and Process, 156-90 (1997).

See, United States v. La Salle National Bank, 437 U.S. 298, 316-17 (1978).

City of Chicago v. United States, 396 U.S. 162, 165 (1969); Chum Mechling Corp. v. United States, 566 F.2d 722,

724-25 (D.C. Cir. 1977); Dresser Industries, Inc. v. United States, 596 F.2d 1231, 1235 N.1 (5th Cir. 1979), cert denied,

444 U.S. 1044 (1980); SEC v. Howatt, 525 F.2d 226, 229 (1st Cir. 1975); Kixmiller v. SEC, 492 F.2d 641, 645 (D.C.

Cir. 1974) (per curiam).

United States v. American Target Advertising, Inc., 257 F.3d 348 (4th Cir. 2001). SEC v. Wheeling-Pittsburgh Steel

(continued...)

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The cases indicate, at least in their rhetoric, that identification and categorization of the subject

proceedings are significant. We turn now to a review of the pertinent case law which serves to

illustrate the types of factors the courts have identified as relevant in different kinds of

proceedings.

B. The Foundation Cases

1. Pillsbury Co. v. FTC

The seminal case with respect to the nature and extent of permissible congressional intercession

into agency adjudicatory or quasi-adjudicatory proceedings is the 1966 decision of the Court of

Appeals for the Fifth Circuit in Pillsbury Company v. Federal Trade Commission,32 which held a

Federal Trade Commission (FTC) divestiture order invalid because the Commission’s decisional

process had been tainted by impermissible congressional influence. At issue was an intense

interrogation at a Senate subcommittee hearing of the FTC Chairman and several members of his

staff on a key issue in an antitrust adjudication involving the Pillsbury Company which was then

pending before the Commission. The Senators expressed opinions on the issue and criticized the

FTC for its interpretation of section 7 of the Clayton Act in a previous interlocutory order in

Pillsbury’s favor.33 The clear message of the Senate committee criticism was that the FTC should

have ruled against Pillsbury.34 In its subsequent final decision the Commission ruled as the

Committee had suggested. The appeals court found the Senate inquiry to be an “improper

intrusion into the adjudicatory process of the Commission.” The court based its holding on the

fact that the agency was acting in a judicial capacity. As a consequence, the private litigants had a

“right to a fair trial” and the “appearance of impartiality” as part of the general guarantees of

procedural due process when the agency is acting in a judicial or quasi-judicial capacity. The

court emphasized the judicial nature of the function the agency was performing and explained

that in order to protect the integrity of that type of process, it was proscribing the subcommittee’s

action because it cast doubt upon the “appearance of impartiality” of the decisionmakers, and not

because of any finding that the Commission had actually been influenced.

... However, when [a congressional] investigation focuses directly and substantially upon the

mental decisional processes of a Commission in a case which is pending before it, Congress

is no longer intervening in the agency’s legislative function, but rather, in its judicial

function. At this latter point, we become concerned with the right of private litigants to a fair

trial and, equally important, with their right to the appearance of impartiality, which cannot

be maintained unless those who exercise the judicial function are free from powerful external

influences ...

(...continued)

Corp., 648 F.2d 118 (3d Cir. 1981) (en banc); United States v. RFB Petroleum, Inc., 793 F.2d 528, 532-33 (Em. Appl.

1983); United States v. Phoenix Petroleum Corp., 571 F. Supp. 16 (S.D. Tex 1982); United States v. Armada

Petroleum Corp., 562 F. Supp. 43 (S.D. Tex. 1982).

354 F.2d 952 (5th Cir. 1966).

Early in the proceeding, the FTC had issued an interlocutory order announcing it would use the rule of reason rather

than a per se rule to evaluate acquisitions under the Clayton Act.

The committee chairman’s questioning of the FTC chairman, as well as that of the committee members was hostile

and pointed and expressed the strongly held view that the FTC should use the per se rule, and both the senators and the

FTC chairman frequently referred to the facts of the Pillsbury case to illustrate their views. See 354 F.2d at 955-62.

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To subject an administrator to a searching examination as to how and why he reached

his decision in a case still pending before him, and to criticize him for reaching the “wrong”

decision, as the Senate subcommittee did in this case, sacrifices the appearance of

impartiality—the sine qua non of American judicial justice—in favor of some short-run

notions regarding the Congressional intent underlying an amendment to a statute, unfettered

administration of which was committed by Congress to the Federal Trade Commission.

It may be argued that such officials as members of the Federal Trade Commission are

sufficiently aware of the realities of governmental, not to say “political,” life as to be able to

withstand such questioning as we have outlined here. However, this court is not so

“sophisticated” that it can shrug off such a procedural due process claim merely because the

officials involved should be able to discount what is said and to disregard the force of the

intrusion into the adjudicatory process. We conclude that we can preserve the rights of the

litigants in a case such as this without having any adverse effect upon the legitimate exercise

of the investigative power of Congress. What we do is to preserve the integrity of the judicial

aspect of the administrative process.35

2. D.C. Federation of Civic Associations v. Volpe

D.C. Federation of Civic Associations v. Volpe,36 decided by the D.C. Circuit five years later,

provides an apt counterpoint to Pillsbury. D.C. Federation also involved a claim of undue

congressional influence but not within the context of a judicial or quasi-judicial proceeding. The

principles enunciated by the court as necessary to establish a claim of taint in such a situation

mark out the boundaries of permissible congressional action which have influenced courts since

then. D.C. Federation involved the approval by the Secretary of Transportation of construction of

the Three Sisters Bridge across the Potomac River. Two issues were presented: first, whether the

Secretary failed to comply within statutory requirements prior to approval of construction; and

second, whether the Secretary’s determinations were tainted by extraneous pressures. With regard

to the first issue, a majority of the court found that in a number of critical respects the Secretary

had failed to comply with applicable statutory standards which therefore required a remand for

further agency determinations.

Although this finding would have been sufficient to dispose of the case, Judge Bazelon chose to

deal with the “taint” issue. That involved the allegation that threats by the Chairman of the House

appropriation subcommittee, which had jurisdiction over the funding of District of Columbia’s

transportation construction projects to deny funds for the District’s proposed subway system

unless the bridge project was approved and whether those threats had a legal impact on the

Secretary’s subsequent approval decision. Judge Bazelon stated that he was “convinced that the

impact of this is sufficient, standing alone, to invalidate the Secretary’s action. Even if the

Secretary had taken every formal step required by every applicable statutory provision, reversal

would be required, in my opinion, because extraneous pressure intruded into the calculus of

considerations on which the Secretary’s decision was based.”37

Judge Bazelon pointed out that he was alone in this opinion: “Judge Fahy, on the other hand, has

concluded that since critical determinations cannot stand irrespective of the allegations of

Id. at 964.

459 F.2d 1231 (D.C. Cir. 1971), cert. denied 405 U.S. 1030 (1972).

459 F.2d at 1245-46.

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pressure, he finds it unnecessary to decide the case on this independent ground.”38 But it is to be

noted that the disagreement between Judges Bazelon and Fahy was not as to the applicable

principle of law but rather as to whether the district court below had found there had been any

consideration by the Secretary of extraneous influence:

While Judge Fahy is not entirely convinced that the District Court ultimately found as a fact

that the extraneous pressure had influenced the Secretary—a point which is for me clear—he

has authorized me to note his concurrence in my discussion of the controlling principle of

law: namely, that the decision would be invalid if based in whole or in part on the pressures

emanating from Representative Natcher. Judge Fahy agrees, and we therefore hold, that on

remand the Secretary must make new determinations based strictly on the merits and

completely without regard to any considerations not made relevant in the applicable statute.39

Judge Bazelon’s opinion makes it clear that the court’s standard—that extraneous congressional

influences actually shown to have had an impact on an agency decision will taint such

administrative action40–is crafted for the special administrative circumstances of the situation

before it: where the decisional process was neither judicial or legislative in nature.

The District Court was surely correct in concluding that the Secretary’s action was not

judicial or quasi-judicial, and for that reason we agree that much of the doctrine cited by

plaintiffs is inapposite. If he had been acting in such a capacity, plaintiffs could have

forcefully argued that the decision was invalid because of the decisionmaker’s bias or

because he had received ex parte communications. Well-established principles could have

been invoked to support these arguments, and plaintiffs might have prevailed even without

showing that the pressure had actually influenced the Secretary’s decision. With regard to

judicial decisionmaking, whether by court or agency, the appearance of bias or pressure may

be no less objectionable than the reality. But since the Secretary’s action was not judicial,

that rationale has no application here.

If, on the other hand, the Secretary’s action had been purely legislative, we might have

agreed with the District Court that his decision could stand in spite of a finding that he had

considered extraneous pressures. Beginning with Fletcher v. Peck, the Supreme Court has

maintained that a statute cannot be invalidated merely because the legislature’s action was

motivated by impermissible considerations (except, perhaps, in special circumstances not

applicable here). Indeed, that very principle requires us to reject plaintiffs’ argument that the

approval of the bridge by the District of Columbia City Council was in some sense invalid.

We do not sit in judgment of the motives of the District’s legislative body, nor do we have

authority to review its decisions. The City Council’s action constituted, in our view, the

approval of the project required by the statute.

Thus, the underlying problem cannot be illuminated by a simplistic effort to force the

Secretary’s action into a purely judicial or purely legislative mold. His decision was not

“judicial” in that he was not required to base it solely on a formal record established at a

public hearing. At the same time, it was not purely “legislative” since Congress had already

established the boundaries within which his discretion could operate. But even though his

action fell between these two conceptual extremes, it is still governed by principles that we

Id. at 1246.

Id.

Judge Bazelon emphasized that he believed that under the circumstances of the case, the congressional threats

involved were taken into account by the Secretary: “In my view, the District Court clearly and unambiguously found as

a fact that the pressure exerted by Representative Natcher and others did have an impact on Secretary Volpe’s decision

to approve the bridge.” 459 F.2d at 1246.

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had thought elementary and beyond dispute. If, in the course of reaching his decision,

Secretary Volpe took into account “considerations that Congress could not have intended to

make relevant,” his action proceeded from an erroneous premise and his decision cannot

stand. The error would be more flagrant, of course, if the Secretary had based his decision

solely on the pressures generated by Representative Natcher. But it should be clear that his

action would not be immunized merely because he also considered some relevant factors.41

Thus, the court appeared to view undue influence cases as classifiable on a continuum, with the

applicable standard dependant on where on the continuum the nature of the case places it. If a

proceeding is one in which judicial or quasi-judicial functions are being exercised, then the

highest standard of conduct is required, and only a showing of interference with merely the

“appearance of impartiality,” without proof of actual partiality or other effect of the extraneous

influences, is necessary.42 If the decisionmaking is “purely legislative” (policymaking) in nature,

such as takes place in informal rulemaking, then the courts will be most deferential, even in the

face of heavy extraneous pressures, to the political nature of the process. Finally, where a

decisional process involves application of ascertainable legislative standards by an agency official

in a situation that cannot be categorized as either judicial or legislative, i.e., informal

decisionmaking, then a claim of impermissible interference will be sustained only on a showing

of actual effect. The courts appear to have been guided by this suggested mode of analysis.

3. The Critique of Pillsbury and D.C. Federation

The rulings in Pillsbury and D.C. Federation have received surprisingly limited attention over the

years, but what commentary there is has been generally critical, emphasizing both courts’ failure

to give proper weight to the values of the political process in such cases.43 An influential 1990

article by Professor Richard J. Pierce, Jr., a leading administrative law scholar, reflects practical

concerns raised by the decisions.44 Pierce agrees that the Pillsbury court reached a defensible

result in light of the circumstances presented: the contested issues of fact were at least arguably

adjudicatory in nature rather than legislative and the intense interrogation could be viewed as

pressure to resolve the facts against Pillsbury, thereby creating the appearance of impropriety.

Thus, even though it is impossible to determine whether the FTC’s resolution of those facts was

in fact influenced by the hostile questions, Pierce argues that one could infer that the FTC

purposely resolved adjudicative facts against Pillsbury in response to the committee’s attacks.

Pierce’s concern, however, is that the 5th Circuit did not decide the case on this narrow ground,

but announced the far broader principle that “[w]hen [a congressional] investigation focuses

directly and substantially upon the mental decisional processes of a Commission in a case before

it, Congress is . . . intervening [impermissibly] in the agency’s adjudicatory function.”45

Application of such a broadly stated prohibition in future cases, Pierce asserts, could result in

findings attributable to congressional pressure without regard to the actual context of the

congressional proceeding and

would constitute an unjustified judicial interference with the political process of

policymaking. Whether to apply the rule of reason or a per se rule to acquisitions under the

459 F.2d at 1246-48 (footnotes omitted).

The court quite clearly accepted the Pillsbury doctrine. See 459 F.2d at 1246 notes 75-78.

See commentaries listed in footnote 1.

Political Control, supra footnote 1.

Political Control at 500, quoting Pillsbury.

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Clayton Act is purely a policy decision . . . Legislators should be free to express their views

on this policy issue, and FTC commissioners should be free to change their minds and adopt

those views. This is the political process functioning properly. It is of no consequence to the

judiciary whether the FTC changes its policy because it is persuaded by the merits of the

legislators’ arguments, or because it fears that the legislature will retaliate . . . Similarly, the

courts should not distinguish between policy decisions made through rulemaking and policy

decisions developed in adjudicatory proceedings. To paraphrase Justice Holmes, judicial

process values should trump political process values only when an agency has singled out an

individual for adverse treatment.46

While finding Pillsbury’s holding defensible, Professor Pierce deems D.C. Federation

indefensible, “stand[ing] for the principle that two politically accountable branches cannot

compromise their frequently differing policy preferences.”47 In Pierce’s view, the case was about

a political dispute over the allocation of transportation funds between the administering agency

and the key congressional appropriating subcommittee. The secretary preferred seeing a subway

built; the subcommittee (and Congress) wanted a bridge built. After a heated public dispute, a

political compromise was effected whereby both projects would go forward. But the appeals court

intervened finding that the secretary’s decisions, which were part of the political deal, were

infected with impermissible bias as a result of legislative branch pressure. In the words of the

court, “the impact of this pressure is sufficient, standing alone, to invalidate the Secretary’s

action.”48 In Professor Pierce’s view:

D.C. Federation is hard to explain in a democracy in which two politically accountable

branches of government share the power to make policy. The agency was not adjudicating a

dispute involving individual rights; nor was it resolving contested issues of adjudicative fact.

Perhaps the case stands for the principle that the two politically accountable branches cannot

compromise their frequently differing policy preferences. But if so, it is a singularly arrogant

decision. The Constitution created a system of shared and coordinated policymaking by the

two politically accountable branches. The Framers included many features to force

compromise between the two branches: The President’s role in the legislative process, the

Senate’s role in approving policymaking officials for the executive branch, the Senate’s role

in ratifying treaties and the exclusive power of the House to initiate tax and appropriations

bills. Our nation would be ungovernable in the absence of constant policy compromises

between the executive and legislative branches.49

As will be seen in the following review of the undue influence case law since the decisions in

Pillsbury and D.C. Federation, Professor Pierces’s pragmatic views appear to have been

influential.

C. Adjudicatory Rulings Since Pillsbury

Since the decision in Pillsbury, while courts have continued to recognize verbally the vitality of

that precedent, only one court has actually overturned a quasi-judicial agency proceeding on

grounds of undue political influence, and the most recent judicial rulings have evinced a clear

Id. at 500-01.

Id. at 496.

D.C. Federation, supra 459 F.2d at 1244.

Political Control at 496-97. See also Pierce Treatise, supra footnote 1, at 676-78, reiterating and updating his 1990

critique of Pillsbury and D.C. Federation.

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predilection to defer to congressional actions where they involve the legitimate exercise of

legislative oversight and investigative functions.

1. Koniag v. Kleppe

The solitary ruling referred to occurred in Koniag v. Kleppe,50 in which a district court set aside

adjudicatory decisions of the Secretary of the Interior with respect to the eligibility of several

communities to receive land and money under the Alaska Native Claims Settlement Act

(ANSCA), at least in part because it found improper congressional pressure exerted on the

Department and the Secretary. There, a congressional subcommittee held oversight hearings on

the administration of the Act while the proceedings in question were pending. The district court,

however, found that the hearings went substantially beyond the oversight function.

The hearings took place during the time that the validity of certain claims being

advanced by the plaintiffs was being litigated before the Secretary and following upon earlier

correspondence which the Congressman had addressed to various subordinates of the

Secretary. The stated purpose of the hearings was to present a forum for discussing the

implementation of the Act but in fact the Committee, through its chairman and staff

members, probed deeply into details of contested cases then under consideration, indicating

that there was “more than meets the eye.” The entire rule-making process was re-examined,

travel vouchers and other information were sought to probe the adequacy of the

investigations made, all papers in the pending proceedings were demanded, the accuracy of

data and procedures was questioned, and constantly the Committee interjected itself into

aspects of the decisionmaking process. 51

When the departmental officials expressed concern about the integrity of the quasi-judicial

administrative process, the Chairman several times stated that it was not his purpose to pressure

the Department, but he many times stated his doubts that the law was being properly carried out.

The court noted: “On key issues now in dispute before the Court, representatives of the

Government were obligated to take positions as to the interpretation of the Act. A strenuous effort

was made by the Chairman to encourage protest and appeals, coupled with comments indicating

his clear impression that all that could be done was being done and that some of the results being

reached were contrary to congressional intent.”52

Two days before the Secretary made his determination on the eligibility of the villages, the

Chairman sent a letter to him requesting that he postpone his decision on the matter pending a

review and opinion by the Comptroller General because it “appears from the testimony [at the

hearings] that village eligibility and Native enrollment requirements of ANSCA have been

misinterpreted in the regulations and that certain villages should not have been certified as

eligible for land selections under ANSCA.”53 On these facts the district court vacated the

Secretary’s eligibility decisions and reinstated the decisions initially rendered by the Bureau of

Indian Affairs (BIA).

405 F. Supp. 1360 (D.D.C. 1975), modified sub nom. Koniag v. Andrus, 580 F.2d 601 (D.C. Cir. 1978), cert. denied,

439 U.S. 1052 (1978).

405 F. Supp. at 1371.

Id. at 1371-72.

Id.

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On appeal, the District of Columbia Circuit Court of appeals disagreed in part with the lower

court’s application of the relevant law but not with its validity. Thus, with regard to the

Chairman’s conduct of the hearings, the appeals court found fault with the district court’s ruling

because none of the agency officials subjected to the Chairman’s interrogations was an agency

decisionmaker.

The hearings in question were called by Congressman Dingell in June of 1974 at the

time the Board and the Secretary were considering most of these cases.... During the hearings

Congressman Dingell made no secret of his displeasure with some of the initial BIA

eligibility determinations. Nevertheless, we think the Pillsbury decision is not controlling

here because none of the persons called before the subcommittee was a decisionmaker in

these cases. One possible exception was Mr. Ken Brown, a close advisor to the Secretary

who briefed him on the cases at the time he decided to approve the Board’s recommended

decisions. However, even if we assume that the Pillsbury doctrine would reach advisors to

the decisionmaker, Mr. Brown was not asked to prejudge any of the claims by characterizing

their validity. See Pillsbury Co. v. FTC, supra at 964. The worst cast that can be put upon the

hearing is that Brown was present when the subcommittee expressed its belief that certain

villages had made fraudulent claims and that the BIA decisions were in error. This is not

enough.54

With regard to the Chairman’s letter, however, the court of appeals found “it compromised the

appearance of the Secretary’s impartiality,” and thereby tainted the decision, citing Pillsbury

approvingly. But rather than reinstate the BIA decisions, the matter was remanded to the

Secretary since three and a half years had passed and a new Secretary of a new Administration

had taken office, thus making possible a fair and dispassionate treatment of the matter.55

2. Gulf Oil Corporation v. FPC

Other than Koniag, reviewing courts have consistently upheld congressional intercessions into

adjudicatory proceedings against undue political influence challenges. In Gulf Oil Corporation v.

FPC,56 for example, petitioners sought to overturn a Federal Power Commission (FPC) order

requiring delivery of larger quantities of natural gas. In upholding the order, the appeals court

rejected a claim that members and staff of the FPC had been subjected to improper interrogation

and interference in the decision of the matter by the Subcommittee on Oversight and

Investigations of the House Interstate and Foreign Commerce Committee at hearings and in

correspondence. The court recognized the relevance of Pillsbury to such an adjudicatory

proceeding but acknowledged that it had to be sensitive to the legislative importance of

congressional committees in oversight and investigation and recognized that “their interest in the

objective and efficient operation of regulatory agencies serves a legitimate and wholesome

function with which we should not lightly interfere.”57 Balancing the interests of integrity of an

adjudicatory proceeding and congressional oversight, the court found determinative distinctions

between Pillsbury and the case before it. First, the court found that the subcommittee was not

concerned with the merits of the agency’s decision, as was the situation in Pillsbury, but “was

directed at accelerating the disposition and enforcement of the FPC’s compliance procedures.”58

580 F.2d at 610.

Id.

563 F.2d 588 (3d Cir. 1977).

563 F.2d at 610.

Id. at 611.

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Nor did the court find any effort to influence the Commission in reaching any decision on the

specific facts of the case or any factual prejudice. Any intrusions into the merits of the FPC’s

decision were found to be “incidental to the purpose of accelerating” the agency’s disposition of

the case. Those “incidental intrusions” were found not to have had serious influence on the

agency because (1) the interrogation did not reflect the majority view of the subcommittee; (2)

the agency did not accede to Members’ requests and continued with the show cause proceeding;

and (3) the ultimate resolution of the issue was the same as it had been in proceedings concluded

a year prior to the hearings in question. 59 Concluding that the claim of prejudice could not be

sustained under the facts and circumstances of the case, the court recapitulated the factors it had

taken into consideration:

Weighing these factors–the importance and need for Congressional oversight of

regulatory agencies, the Commission’s evident strong backbone in resisting subcommittee

pressure, the Commission’s identical resolution of each issue in its prior decision, the

entirely legal nature of the Commission’s decision, and our agreement with that decision–

against our commitment to the principle that administrative agencies must be allowed to

exercise their adjudicative functions free of Congressional pressure, we conclude that the

legislative conduct in this case did not affect the fairness of the Commissions proceedings

and does not warrant our setting aside the Commission’s order.60

3. Peter Kiewit Sons’ Co. v. U.S. Army Corps of Engineers

In Peter Kiewit Sons’ Co. v. U.S. Army Corps of Engineers,61 the appeals court dealt with the

effects of the conduct of a Senator at prior congressional investigations on the subject of

debarment of government contractors convicted of bid-rigging and similar offenses, and his

recommendations and status inquiries contemporaneous with an ongoing debarment proceeding.

The plaintiff, the subject of the debarment proceeding, claimed that the Senator’s persistence in

the subject area, and his particular interest in its case, compromised the integrity of the

administrative proceeding. The district court agreed. On appeal, the District of Columbia Circuit

Court reversed.

The appeals court acknowledged that a judicial or quasi-judicial proceeding could be invalidated

by the appearance of bias or pressure and that under that standard “pressure on the decisionmaker

alone, without proof or effect on the outcome, is sufficient to vacate a decision.”62 Thus, “[t]he

test is whether ‘extraneous factors intruded into the calculus of consideration’ of the individual

decisionmaker.”63 In the case before it, the court found neither actual nor apparent congressional

interference since the Senator had never communicated directly with the ultimate decisionmaker

in the debarment, the Assistant Judge Advocate General for Civil Law, nor was it shown that that

official was even aware of the Senator’s communications.

Id.

Id. at 612.

714 F.2d 163 (D.C. Cir. 1983).

714 F.2d at 169.

Id. at 170 (emphasis by court).

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4. Power Authority of the State of New York v. FERC

Challenged congressional communications in an adjudicatory setting were next rejected in Power

Authority of the State of New York v. FERC.64 This was an action for review of a series of

decisions by the Federal Energy Regulatory Commission (FERC) which involved, inter alia, the

claim that four Members of Congress allegedly engaged in ex parte communications with FERC

in connection with a proceeding for a declaratory order regarding the allocation of power

generated by waters of the Niagara River. The communications in question consisted of a letter

from two House Members to President Reagan which the President forwarded to the Chairman of

FERC, and a press conference attended by the four defendants, FERC officials and the public, at

which the petitioners urged reversal of an administrative law judges’s decision against them. At

the time FERC was considering petitions for rehearing, one of the petitioners filed a motion with

FERC to deny rehearing because the proceeding had been tainted. The Commission denied the

motion on the ground that the ex parte communications had not undermined “the integrity of ...

[the Commission’s] processes.” That same decision also resolved the merits of the proceeding and

the Municipal Electric Utilities Association of New York (MEUA) and other parties sought

appellate review.

The Second Circuit Court of Appeals summarily rejected MEUA’s contentions with the following

analysis:

Ex parte communications by Congressmen or any one else with a judicial or quasijudicial body regarding a pending matter are improper and should be discouraged. On the

other hand, the mere existence of such communications hardly requires a court or

administrative body to disqualify itself. Recusal would be required only if the

communications posed a serious likelihood of affecting the agency’s ability to act fairly and

impartially in the matter before it. Gulf Oil Corp. v. FPC, 563 F. 2d 588, 611-12 (3d Cir.

1977). In resolving that issue, one must look to the nature of the communications and

particularly to whether they contain factual matter or other information outside of the record,

which the parties did not have an opportunity to rebut. See Professional Air Traffic

Controllers Organization v. FLPA, 672 F. 2d 109, 112-13 (D.C. Cir. 1982); United States

Lines v. Federal Maritime Commission, 584 F.2d 519, 533-34 (D.C. Cir. 1978).

The communications here fall far short of meeting these requirements. No new evidence

was introduced. There was nothing secret about the letters. MEUA was promptly made

aware of the correspondence by the Commission and had a full opportunity to comment and

respond. Since MEUA had no rebuttal evidence to offer– indeed, none was called for - an

evidentiary hearing was unnecessary. The Commission properly denied MEUA’s motion.65

5. State of California v. FERC

The two most recent appellate court rulings continue the trend of the courts not to interfere with

congressional attempts to influence quasi-adjudicatory proceedings, emphasizing judicial

recognition of the important constitutional role of oversight and investigation and the

demonstrated ability of agencies to shield their sensitive adjudicatory processes from due process

intrusions. In State of California v. FERC,66 an applicant for a license to build a hydroelectric

743 F.2d 93 (2d Cir. 1984).

743 F.2d at 110.

966 F.2d 1541 (9th Cir. 1992).

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facility challenged the award of a conditioned license on the grounds, among others, that letters

from the Chairman of the House Energy and Commerce Committee unduly influenced, and

thereby tainted, the entire sequence of Federal Energy Regulatory Commission orders which

resulted in the conditioned license, relying on the Pillsbury case. In three letters to FERC, the

Chairman complained that the agency had not followed the recently enacted dispute resolution

procedures under the Federal Power Act.67 In response to those complaints, FERC reopened

dispute resolution negotiations with State and federal fish and wildlife agencies prior to the

conclusion of the licensing process. The Chairman also sent two letters to the agency urging it to

review its two decades old interpretation of the Federal Land Policy and Management Act

(FLPMA) that a hydroelectric project sponsor was not required to obtain a right-of-way permit

over public lands from the Bureau of Lands Management of the Department of Interior because

FERC had exclusive jurisdiction over federal hydroelectric development. The Chairman put forth

a contrary view and requested and received support for that view in a report by the General

Accounting Office (GAO). FERC, after initially rejecting the Chairman’s contention and

reaffirming its long held interpretation during the course of the licensing proceeding, reversed its

course after receiving the GAO report.

The appeals court rejected both objections, holding that neither rose “to the level of undue

congressional influence described in Pillsbury nor do they adversely affect the appearance of

impartiality in this case.”68 FERC’s decision to open the dispute resolution process after receipt of

the Chairman’s letters was designed, the court found, to “correct a procedural problem” and “was

based on its own independent analysis of the record in this proceeding, and was an effort to

establish fair procedures to allow the parties and the Commission to investigate.”69 Since the

negotiation requirements were so recent both the Chairman “and the Commission were

understandably concerned about getting off to a good start.”70 With respect to the successful

urging that FERC change its long held interpretation of FLPMA, the court explained that

Pillsbury was not implicated because “FERC gave a reasoned explanation for its reversal of its

original interpretation of FLPMA, and this provides substance for its claim that it addressed and

resolved the right-of-way issue under its own independent and detailed analysis of the issue.”71

The court further noted that the fact that it found (later in its ruling) that the reversal of its past

interpretation was legally incorrect was irrelevant since the record of the proceeding supported

that it had gone through a process of reasoned analysis. “In short, [the Chairman’s] letters,

expressing his views on the 10(j) and FLPMA issues, do not constitute the type of intense and

undue congressional influence that was present in Pillsbury.”72

6. ATX, Inc. v. U.S. Department of Transportation

Finally, in ATX, Inc. v. U.S. Department of Transportation,73 the appeals court found that vocal,

hostile, and intense opposition of Members of Congress to the application of ATX, Inc. to operate

a new airline in Boston, Atlanta and Baltimore/Washington, did not fatally flaw the proceeding

16 U.S.C. 803 (j) (1996) (10(j) procedures).

966 F.2d 1552.

Id.

41 F.3d 1522 (D.C. Cir. 1994).

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held by the Department of Transportation (DOT), and that DOT’s denial of the application on the

ground that ATX was unfit was reasonable.

The pertinent facts of the controversy are essentially as follows. Congressional opposition to ATX

arose even prior to the filing of its application, based largely on the perceived reputation of Frank

Lorenzo, its founder and majority owner, from his previous record of management of a major

airline. Twenty one Members of Congress wrote the Secretary of DOT urging him to deny ATX’s

application even before it had been filed, because of Lorenzo’s alleged unfitness to own and

operate an airline. 74 Most of the signatures on the letter were members of the House committee

with jurisdiction over DOT, including the chair of the full committee, the chair of the Aviation

Subcommittee, and the chair of the Oversight Subcommittee. After ATX filed its application, 125

House and Senate members wrote the Secretary to declare their opposition to Lorenzo. Two

congressmen introduced legislation to prohibit Lorenzo from re-entering the airline industry.75

The Secretary responded by acknowledging receipt of the letters, refusing to comment on the

merits, and putting the correspondence in a file for “contacts outside the record of the case.”76

During the hearing on the application one of the congressional letter writers was allowed to

testify as to his opposition. Ultimately the Department rejected the application on the ground that

ATX “lacked both managerial competence to operate an airline and a disposition to comply with

regulatory requirements.”77

In rejecting the undue influence challenge, the court acknowledged that the size, vocality, and

source of the congressional opposition toward the applicant in this quasi-judicial proceeding

required close judicial scrutiny to allay due process concerns with the alleged appearance of bias.

The court explained

... In the nonjudicial context, we have suggested that the way to cure the appearance of bias

may be to establish “a full scale administrative record which might dispel any doubts about

the true nature of [the agency’s] action.” Volpe, 459 F. 2d at 1249. With respect to the nexus

requirements, we have never questioned the authority of congressional representatives to

exert pressure, see id., and we have held that congressional actions not targeted directly at

the decision makers-such as contemporaneous hearings–do not invalidate an agency

decision. See Koniag, 580 F. 2d at 610. Under this framework, it is apparent that none of the

congressional pressure challenged by ATX is sufficient to invalidate the adjudication.78

The court commented that the influence with which it was concerned is “when congressional

influence shapes the determination of the merits.” The court commented that the lengthy opinion

supporting the decision based on the administrative record “was clear and open to scrutiny and

[the] decision was fully supported by the record. There is no reason for us to infer that the letters

influenced his decision inasmuch as he did not reverse the ALJ’s recommendation nor was the

merits decision a close one on the record.”79 The testimony of the congressman at the hearing did

not create “a fatal appearance of bias as it was based almost entirely on information already

41 F.3d at 1524.

Id. at 1525.

Id.

Id. at 1526.

Id. at 1528.

Id. at 1528-29 (emphasis in original).

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available to the ALJ, was void of threats and was not relied on in any of the decisions, which

were accompanied by extensive findings and reasons.”80 The court concluded:

In addition we find no evidence that the legislative activity actually affected the

outcome on the merits. See Kiewit, 714 F. 2d at 169; Volpe, 459 F. 2d at 1246. Neither the

Department’s final decision nor the ALJ’s two decisions mentioned the testimony of the

congressman, the congressional letters or the proposed legislation. All of the congressional

contacts were placed in the administrative record and ATX responded to them. . . . Finally,

the record manifests that both the Secretary and his acting Assistant Secretary were noncommittal in their reactions to the congressional contacts. Secretary Peña’s response to the

correspondence stressed that it was inappropriate for him to discuss the merits of the case

with the congressmen.

***

. . . Here, the nexus between the pressure exerted and the actual decision makers is so

tenuous and the evidence so adequately establishes ATX’s ineligibility for an airline

certificate that we conclude political influence did not enter the decision maker’s “calculus of

consideration.”81

D. Informal Decisionmaking Rulings Since D.C. Federation

1. American Public Gas Association v. FPC

American Public Gas Association v. FPC82 was a case that arose from a FPC ratemaking

conducted pursuant to section 553 of the APA. The Commission first issued Opinion 770, in July

1976, and on rehearing, issued Opinion 770-A in November of the same year. In August 1976,

while the rehearing was pending, Representative John Moss, chairman of the Oversight

Subcommittee of the House Interstate and Foreign Commerce Committee, summoned the

Commissioners to appear at a hearing. Representative Moss, who with three other members of the

subcommittee had been parties to the proceeding before the FPC, subjected the Commissioners to

what the reviewing court described as an “intensive examination.” Decisions underlying Opinion

770 came under attack, notwithstanding the fact that the Commission had warned the

congressmen that those decisions were subject to reconsideration on rehearing. In the D.C.

Circuit’s words:

The questioning was not confined to explication of “what the Opinion means and what

its implications are.” Chairman Moss went further, stating: “I am most committed as an

adversary. I find that I am outraged by Order 770. I find it very difficult to comprehend any

standard of just and reasonableness in the decision and I would not want the record to be

ambiguous on that point for one moment.”

Id. at 1529.

Id. at 1529, 1530. See also, Pierce Treatise, supra footnote 1, at 678-79, discussing, with approval, the appeals court

ruling in ATX.

567 F.2d 1016 (D.C. Cir. 1977), cert. denied, 435 U.S. 907 (1978).

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These expressions, coupled with what the court characterized as the Subcommittee Counsel’s

adversarial interrogation about particular factors in the cost analysis of Opinion No. 770, formed

the basis of the claim of prejudice.83

In reaching the question whether the Commission should be disqualified, the Court related the

facts of Pillsbury and described its holding at length. It then observed:

We doubt the utility of classifying the ratemaking undertaken in the present proceedings by

the Power Commission as entirely a judicial, or a legislative function, or a combination of

the two, for in any event the need for an impartial decision is obvious ... Congressional

intervention which occurs during the still-pending decisional process of an agency

endangers, and may undermine, the integrity of the ensuing decision, which Congress has

required be made by an impartial agency charged with responsibility for resolving

controversies within its jurisdiction. Congress as well as the courts has responsibility to

protect the decisional integrity of such an agency.84

However, despite this rhetorical obeisance to the spirit of Pillsbury, the court did not disqualify

the agency, because the producers, though fully aware of all these facts, failed to ask the

Commission to disqualify itself. The court said that a party cannot, with knowledge of the alleged

taint, stay silent in hopes of a favorable decision, and then, when the decision is unfavorable, seek

its reversal on the ground of partiality: “A party, knowing of a ground for requesting

disqualification, cannot be permitted to wait and decide whether he likes subsequent treatment

that he receives.”85 But the court did not end its analysis there. It went on to ask whether the

interference was so serious as to require it sua sponte to void the result and set forth the factors it

took into account in concluding that it would not:

...the character and scope of the interference alleged; the fact that the parties who raise the

disqualification question seem not to have deemed what occurred to impair the impartiality

of the Commission itself independent of the result it reached; the fact that in one important

respect, and indeed the issue that was most vehemently examined by the Congressmen,

namely the correctness of the Commission’s decision respecting the income tax component,

the Commission left standing the disposition criticized at the Subcommittee hearing; the fact

that there is nothing to lead the court to find that actual influence affected Opinion No. 770A; and the fact that insofar as any actions of the Commissioners themselves are concerned no

appearance of partiality is evident.86

In essence, then, the court’s decision turned on its finding of no actual impact of the congressional

intervention on the agency decision. Since the court earlier made clear it understood the differing

standards applied by the Pillsbury and D.C. Federation rulings,87 it would appear to have

considered the proceeding closer in type or form to D.C. Federation.

567 F.2d at 1068.

Id. at 1069.

Id.

Id. at 1070.

Compare the discussion of Pillsbury at 567 F.2d at 1068, with that of D.C. Federation at 567 F.2d at 1069, footnote

101.

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2. Town of Orangetown v. Ruckelshaus

In Town of Orangetown v. Ruckelshaus,88 the Town sought to prevent the Environmental

Protection Agency (EPA) and the New York State Department of Environmental Conservation

(NYSDEC) from approving grants that would modernize an outmoded and overloaded sewage

treatment plant. It was argued that improper political pressure by state and local officials on EPA

caused EPA to reconsider and relax certain conditions on the grants that it had originally imposed

that were important to the Town. The Second Circuit held that in a non-adjudicatory proceeding

involving the disbursement of funds it had to be shown that “political pressure was intended and

did cause the agency’s action to be influenced by factors not relevant under the controlling

statute.”89 Here, the court stated, “The potential effect of proposed grant on area development is

one of the relevant factors for the EPA to consider . . . and elected officials should not be

precluded from bringing those factors to administrators’ attention. [citing Sierra Club v. Costle]

Orangetown ‘may not rest upon mere conclusory allegations’ of improper political influence as a

means of obtaining a trial.”90 Since the EPA decision whether to impose conditions on the grants

was not adjudicatory in nature but “an administrative one dealing with the disbursement of grant

funds, and required no adversary proceeding,” the appeals court concluded that he Town did not

have the status of a party and was not entitled to notice and opportunity to be heard.

“Consequently, such communications as the EPA had with the two public officials did not deprive

[the Town] of due process.”91

3. Chemung County v. Dole

Chemung County v. Dole92 involved a protest over the award of a contract by the Federal Aviation

Administration (FAA) to locate and build a flight service station. The contract was originally

awarded to Elmira, New York (in Chemung County) but was rescinded and then awarded to

Buffalo, New York. It was claimed that the change was improperly effected by the political

pressure brought on the FAA by two New York congressmen. Adopting the rule announced in its

Town of Orangetown ruling, the appeals court found no undue political influence:

The full extent of Representatives Kemp and Nowak’s efforts on behalf of the NFTA

was their having written letters to the FAA and their staffs and having met with the GAO

investigator. Appellees object to the Representatives’ letter to the FAA asking it to refrain

from formally entering into a contract with Chemung County while the GAO audit was

underway. The FAA had a right to suspend performance of a contract pending a GAO audit.

If the audit proved that NFTA had submitted the lowest bid (as it did so prove), the FAA had

the obligation to award the contract to NFTA. See 41 U.S.C. §253b (1982). Thus this letter

urged the FAA to take action directly authorized by the statutory scheme governing the

award of contracts.

Similarly, the Representatives’ letter to the FAA urging the agency to re-evaluate its

telecommunications cost estimates in light of the GAO’s findings was also proper. This letter

was also an attempt to persuade the FAA to abide by its statutory obligations, not ignore

them. As noted above, an award of a government contract to anyone except the bidder with

40 F.2d 185 (2d Cir. 1984).

740 F.2d at 188.

Id.

Id. at 188-89.

804 F.2d 216 (2d Cir. 1986).

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the most advantageous proposal would violate the FAA’s statutory obligations, and the

Representative acted properly in bringing a possible violation of this duty to the agency’s

attention–even if it helped their home districts.93

4. DCP Farms et al v. Yeutter

Finally, in DCP Farms et al v. Yeutter94 the 5th Circuit addressed the issue whether the denial of

farm subsidy payments had been tainted by the intercession of a powerful congressman prior to

commencement of a Department of Agriculture adjudication and thereby required the application

of Pillsbury’s “mere appearance of bias” standard. The adjudication was to be held to determine

whether an aggregation of 51 irrevocable agricultural trusts was entitled to large subsidies in the

face of a statute that limited farm subsidies to $50,000 per “person.” The effect of the trust

scheme would have been to allow DCP Farms $1.4 million in subsidies for the 1989 crop year.

Prior to the award decision, the Department’s Inspector General (IG) issued a report on abuses of

the farm subsidy program which highlighted DCP Farms as an example of “egregious violations

of the $50,000 per person limit.”95 The report received considerable publicity and reached the

attention of the jurisdictional subcommittee of the House Agriculture Committee. Staff of the

subcommittee chairman met with Department officials to discuss the issues raised by the IG

report in late 1989. DCP Farms was specifically discussed. In December 1989 the Chairman

wrote to the Secretary of Agriculture about the reports of abuses in the subsidy program and cited

DCP Farms as an example of the continued abuse of the statutory limit. He urged careful review

of schemes involving irrevocable trusts, particularly in light of the fact that he had had assurances

in the past from USDA officials that no legislative action was needed with respect to the

treatment of such trusts. The chairman received assurance from the Secretary that the DCP Farms

case was under administrative review and that the Department would “take a very aggressive

position in dealing with this case.”96 In June 1990 an administrative decision was issued finding

that DCP Farms had adopted schemes to evade the payment limitation provisions of the law and

was ineligible to receive any subsidy payments for the 1989, 1990 and 1991 crop years. DCP

Farms appealed and requested a hearing, which was set for December 12, 1990. Before the

hearing date DCP Farms learned of the meeting with the chairman’s staff and of the chairman’s

letter and successfully sued to enjoin the hearing on the ground, among others, that improper

congressional interference denied then due process.97

The Fifth Circuit rejected the argument in an opinion that recognizes the need to permit political

oversight with respect to policy issues Congress has entrusted to agency decisionmakers. The

appeals court first rejected the applicability of Pillsbury because “the contact here occurred well

before any proceeding which could be considered judicial or quasi-judicial . . . There was no

hearing on the merits of DCP Farms’ application for farm subsidy payments because DCP Farms

abandoned the administrative process for this litigation.”98 The court saw the dispute between

DCP Farms and the Department as part of a larger policy debate and rejected any connection

804 F.2d at 222.

957 F.2d 1183 (5th Cir. 1992), cert. denied, 506U.S. 953 (1992).

957 F.2d at 1186.

Id. at 1186-87.

Id. at 1187.

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between the preliminary processing of DCP Farms’ application and the appeals hearing that

would raise Pillsbury issues:

In short, the congressional communication here was not aimed at the decisionmaking

process of any quasi-judicial body. Congressman Huckaby was concerned about the

administration of a congressionally created program. The dispute between the USDA and

DCP Farms was part of a larger policy debate. Applying Pillsbury’s stringent “mere

appearance of bias” standard at this juncture of administrative process would erect no small

barrier to Congressional oversight. It reflects an insular view of these administrative

processes for which we find no warrant. We are unwilling to so dramatically restrict

communications between Congress and the executive agencies over policy issues.

Appearance of bias is not the standard.99

The proper standard for this type of case, the court advised, is whether the communication

actually influenced the agency’s decision. This is appropriate, the court explained, because it

protects the proper and effective workings of the political process:

This focus on the intrusion of improper extraneous factors into the agency’s decisionmaking process recognizes the political reality that “members of Congress are requested to,

and do in fact, intrude in varying degrees, in administrative proceedings.” S.E.C. v.

Wheeling-Pittsburgh Steel Corp., 648 F. 2d 118, 126 (3d Cir. 1981) (en banc). It would be

unrealistic to require that agencies turn a deaf ear to comments from members of Congress.

The agency’s duty, so long as it is not acting in its quasi-judicial capacity, is simply to “give

congressional comments only as much deference as they deserve on the merits.” Id.

We are cautious in reading extraneous factors too broadly, lest they impair agency

flexibility in dealing with Congress. In particular, an agency’s patient audience to a member

of Congress will not by itself constitute the injection of an extraneous factor. Nor would a

simple plea for more effective enforcement of a law be the injection of an improper factor. A

truly extraneous factor must take into account “considerations that Congress could not have

intended to make relevant,” D.C. Federation, 459 F. 2d at 1247.

Congressional “interference” and “political pressure” are loaded terms. We need not

attempt a portrait of all their sinister possibilities, even if we were able to do so. We can

make plain that the force of logic and ideas is not our concern. They carry their own force

and exert their own pressure. In this practical sense they are not extraneous. That a

congressman expresses the view that the law ought not sanction the use of fifty-one

irrevocable trusts to gain $1.4 million in subsidies is not impermissible political “pressure.”

It certainly injects no extraneous factor. We find no due process right in these preliminary

efforts to persuade the government to grant farm subsidies sufficient to exclude the political

tugs of the different branches of government, and we see nothing more here. We reject the

holding of the district court that DCP Farms could ignore the administrative procedure yet

available to it and turn to the consequence of this bypass of remedies.100

Id. at 1187-88.

Id. at 1188.

100

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E. Interference With Agency Rulemaking Proceedings

1. Texas Medical Association v. Mathews

In one of the first cases to be decided after D.C. Federation, a district court applied its principles

to find an impermissible congressional intervention in an agency rulemaking proceeding. In Texas

Medical Association v. Mathews,101 the court considered plaintiff’s contention that congressional

pressure should invalidate a decision of the Department of Health, Education and Welfare (HEW)

dividing Texas into nine Professional Standards Review Organizations (PSRO). HEW, after

consulting with the plaintiff and several other interested groups, first announced it would form

one statewide PSRO. But after a lengthy meeting with Senator Wallace Bennett, sponsor of the

PSRO legislation, and a senior staff member of the Senate Finance Committee, an HEW official

abruptly changed his mind and called for the division of Texas into nine PSRO’s.

The court noted that while it had no evidence as to what Senator Bennett or the staffer may have

said during the meeting, HEW was unable to adequately explain its sudden reversal of decision

with regard to the number of PSRO’s so soon after the meeting.102 Moreover, the court found

“proof of a pattern of undue influence by the same Congressional sources permeating HEW’s

entire administrative process relative to PSRO designation for Texas.”103 Applying D.C.

Federation’s principle that “agency action is invalid if based, even in part, on pressures emanating

from Congressional sources,”104 the court concluded that “the fact that an agency decision is a

‘little pregnant’ with pressures emanating from Congressional sources is enough to require

invalidation of the agency action. Especially should this be the law where, as here, the invasive

Congressional source has financial leverage on the involved agency.”105

The fact that the agency action involved in Mathews was in the nature of a rulemaking would not

appear to be an inapt or inconsistent application of D.C. Federation. When Judge Bazelon noted

there that the courts would give absolute deference to legislative actions, it is clear from the

context that he was referring to such action by a legislative body, there the D.C. Council, a

political body directly accountable to its constituency in the electoral process. Where similar

legislative action (informal rulemaking) is taken by an administrative agency, the courts accord

great but not absolute deference to that process since it is not directly accountable to the

electorate. A finding of taint in an informal rulemaking is therefore not foreclosed by the D.C.

Federation rationale. Thus the court in Mathews held that the normal presumption in favor of the

agency’s decision was overcome by the evidence of the pervasive and invasive nature of the

congressional intrusions. However, while the ruling is not inconsistent with D.C. Federation, the

holdings in U.S. ex rel Parco v. Morris, and Sierra Club v. Costle, to be discussed next, appear to

reflect more accurately the nature and extent of the currently prevailing judicial deference to

congressional attempts to influence policymaking in the rulemaking process.

101

408 F. Supp. 303 (W.D. Tex 1976).

Id. at 312-13.

103

Id. at 310.

104

Id. at 306.

105

Id. at 313.

102

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2. United States ex rel Parco v. Morris

United States ex rel Parco v. Morris106 involved a challenge by deportable aliens to the rescission

by the Immigration and Naturalization Service of a longstanding operating instruction which

would have allowed them to extend the date of their voluntary departure. Plaintiff’s contended,

inter alia, that the change in policy was precipitated by the direct pressure applied by

Representative Peter Rodino who was then chairman of the subcommittee responsible for the

oversight of the administration of the immigration laws. It was conceded that Representative

Rodino’s request was the direct impetus for the change in policy. The court rejected the

contention based on its reading of the D.C. Federation. That holding, it said, was based upon a

“public and enforceable threat” by a congressman to withhold public funds for a particular

purpose unless an agency official acceded to the congressman’s wishes, and evidence that the

official’s decision was based in part on that pressure.107 The court went on to note the importance

of the nature of the proceeding in analysis of such cases.

However, Judge Bazelon’s analysis of this principle distinguishes sharply between

agency action which is “judicial” or “quasi-judicial” and agency action which is

“legislative.” The former concept related to agency adjudication of a particular, individual

case, or when it renders a decision on the record compiled in formal hearings; in such

instance the consideration of extraneous pressuring influences undermines the fairness of the

hearing accorded the adverse parties. Id. at 1246; accord, Pillsbury Co. v. FTC, 354 F. 2d

952, 964 (5th Cir. 1966); Texas Medical Assoc v. Mathews, 408 F. Supp. 303 (W.D. Tex.

1976); Koniag, Inc. v. Kleppe, 405 F. Supp. 1360, 1371-73 (D.D.C. 1975) (Gesell, J.). On

the other hand, when the agency action is purely “legislative,” as in the informal rulemaking

involved here, the decision “cannot be invalidated merely because the ... action was

motivated by impermissible considerations” any more than can that of a legislature. D.C.

Federation, supra, 459 F. 2d at 1247; cf. Fletcher v. Peck, 10 U.S. (6 Cranch) 87, 129-313, 3

L.Ed. 162 (1810).108

The court concluded that since plaintiffs did not claim that Representative Rodino had interfered

with the “quasi-judicial decision to deny them extended voluntary departure,”109 but rather were

attacking the motivation of the official in changing the agency’s policy, a “purely’ legislative

action,110 they had to meet a more stringent standard of proof. The court ruled they had failed to

do so.111

3. Sierra Club v. Costle

The seminal case in this line is Sierra Club v. Costle,112 in which the appeals court found no taint

of the rulemaking proceeding there for failure to docket post-comment period meetings with the

Senate majority leader. The court concluded that it would not set aside a rulemaking simply on

the grounds that political pressure had been exerted in the process. It ruled that there has to be a

106

426 F. Supp. 976 (E.D. Pa 1977).

Id. at 982.

108

Id.

109

Id.

110

Id.

107

111

Id. The court ultimately declared the rescission invalid for failure to comply with the APA’s rulemaking and

publication requirements, 5 U.S.C. 552 (a)(1), 553 (2000).

112

657 F.2d 298 (D.C. Cir. 1981).

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showing that “the content of the pressure on this [decisionmaker] is designed to force him to

decide upon factors not made relevant by Congress in the applicable statute” and also that the

determination made “must be affected by those extraneous considerations.”113 More particularly,

it was alleged that an “ex parte blitz” conducted after the comment period for an informal

rulemaking had caused the Environmental Protection Agency (EPA) to back away from its

support of a more stringent emission standard and was therefore unlawful and prejudicial.114 Postcomment period communications included a number of oral conversations and briefings between

agency officials and private parties and other government officials, including the majority leader

of the United States Senate and the President of the United States.

The appeals court initially noted that the statute in question there did not require the docketing of

all post-comment period conversations and meetings and refused to apply a blanket rule requiring

such docketing. To the contrary, where the nature of the rulemaking is general policymaking, the

court expressed the view that “the concept of ex parte contacts is of more questionable utility.”

Indeed, the court deemed informal contacts vital to the effectiveness and legitimacy of our

governmental processes.

Under our system of government, the very legitimacy of general policymaking

performed by unelected administrators depends in no small part upon the openness,

accessibility, and amenability of these officials to the needs and ideas of the public from

whom their ultimate authority derives and upon whom their commands must fall. As judges

we are insulated from these pressures because of the nature of the judicial process in which

we participate; but we must refrain from the easy temptation to look askance at all face-toface lobbying efforts, regardless of the forum in which they occur, merely because we see

them as inappropriate in the judicial context. Furthermore, the importance to effective

regulation of continuing contact with a regulated industry, other affected groups, and the

agency to win needed support for its program, reduce future enforcement requirements by

helping those regulated to anticipate and shape their plans for the future, and spur the

provision of information which the agency needs.115

However, the court inferred from the statutory scheme that oral comments “of central relevance to

the rulemaking” should be placed in the record. Although the court conceded that this allows the

agency to decide in its own discretion which comments are relevant, the court did not find this to

be a persuasive enough consideration to require a more stringent rule.

EDF is understandably wary of a rule which permits the agency to decide for itself when oral

communications are of such central relevance that a docket entry for them is required. Yet

the statute itself vests EPA with discretion to decide whether “documents” are of central

relevance and therefore must be placed in the docket; surely EPA can be given no less

discretion in docketing oral communications concerning which the statute has no explicit

requirements whatsoever. Furthermore, this court has already recognized that the relative

significance of various communications to the outcome of the rule is a factor in determining

whether their disclosure is required. A judicially imposed blanket requirement that all postcomment period oral communications be docketed would, on the other hand, contravene our

limited powers of review, would stifle desirable experimentation in the area by Congress and

the agencies, and is unnecessary for achieving the goal of an established, procedure-defined

113

657 F.2d at 409.

Id. at 386.

115

Id. at 400-01 (footnotes omitted).

114

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docket, viz., to enable reviewing courts to fully evaluate the stated justification given by the

agency for its final rule.116

The appeals court concluded that none of the non-docketed post-comment meetings, including

those with the Senate majority leader and the President, required docketing. It underlined its view

that informal rulemaking involving general policymaking is akin to the legislative process and

therefore the courts should be wary of attempting to probe too deeply. It stated that before an

administrative rulemaking could be overturned simply on the grounds of political pressure, it had

to be shown that “the content of the pressure on the [decisionmaker] is designed to force him to

decide upon factors not made relevant by Congress in the applicable statute” and also that the

determination made “must be affected by those extraneous considerations.”117 Although the

meetings were called at the behest of the majority leader “in order to express ‘strongly’ his

views”118 on the subject of the rulemaking, it found that the agency made no commitments to him

nor was there evidence that he used “extraneous” pressures to further his position. The court

characterized the Senator’s efforts, since they were exerted in a rulemaking proceeding, as within

the accepted boundaries of the political process.

... Americans rightly expect their elected representatives to voice their grievances and

preferences concerning the administration of our laws. We believe it entirely proper for

Congressional representatives vigorously to represent the interests of their constituents

before administrative agencies engaged in informal, general policy rulemaking, so long as

individual Congressmen do not frustrate the intent of Congress as a whole as expressed in

statute, nor undermine applicable rules of procedure. Where Congressmen keep their

comments focused on the substance of the proposed rule—and we have no substantial

evidence to cause us to believe Senator Byrd did not do so here—administrative agencies are

expected to balance Congressional pressure with the pressures emanating from all other

sources. To hold otherwise would deprive the agencies of legitimate sources of information

and call into question the validity of nearly every controversial rulemaking.119

Similarly, with regard to a meeting involving the President, the court held that as long as there is

factual support in the record for the agency’s outcome, it does not matter that “but for” the

Presidential input it would have gone the other way.

Of course, it is always possible that undisclosed Presidential prodding may direct an

outcome that is factually based on the record, but different from the outcome that would have

obtained in the absence of Presidential involvement. In such a case, it would be true that the

political process did affect the outcome in a way the courts could not police. But we do not

believe that Congress intended that the courts convert informal rulemaking into a rarified

technocratic process, unaffected by political considerations or the presence of Presidential

power.120

116

Id. at 402-04 (footnotes omitted).

Id. at 409.

118

Id. at 409.

119

Id. at 409-10 (footnote omitted).

120

Id.

117

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F. Influence That Could Abuse the Agency Investigatory Process

1. SEC v. Wheeling-Pittsburgh Steel Corp.

On rare occasions the claim is made that an agency investigation has been instigated by

congressional pressure or influence and the claim is made by the subject of such investigation that

it is tainted by the political intervention. On even rarer occasions agencies have sought to fend off

congressional oversight of closed or ongoing investigations because of concern that present and

future open cases could be compromised by turning over requested internal deliberative

documents. Agencies argue that such disclosures, even from closed investigations, might be

utilized by attorneys representing potential targets of investigations, or defendants in civil and

criminal actions, as evidence that the investigations or prosecutions are politically motivated and

not driven by legitimate investigatory concerns and are thereby tainted. This notion is said to be

supported by the appellate court ruling in SEC v. Wheeling-Pittsburgh Steel Corp.121 It is argued

that Wheeling-Pittsburgh precludes any agency contact with Members of Congress which would

give the appearance that an agency is acting at the behest of a Member or committee and that its

proper course is to avoid any appearance that its enforcement efforts are being pursued at

Congress’ bidding. The claim, however, does not appear to be an accurate portrayal of either the

Wheeling-Pittsburgh ruling or the case law that preceded or followed it. The Wheeling-Pittsburgh

court made it clear that a court will deem a request for the enforcement of an administrative

subpoena an abuse of the judicial process only if it was in fact shown that the subpoena was

issued because of congressional influence, the agency knew its process was being abused, that it

knowingly did nothing to prevent the abuse, and that it vigorously pursued the frivolous charges.

Under the standard articulated by the appeals court the motivation of the Members of Congress is

irrelevant; the focus is on the actual impact of the congressional intercession on the motivation of

the agency itself. Simply the appearance of impropriety is not enough to taint the proceeding.

SEC v. Wheeling-Pittsburgh Steel Corp. involved the initiation of an informal investigation of

Wheeling-Pittsburgh Steel Corporation after the receipt by the Securities and Exchange

Commission of a letter from a United States Senator suggesting that Wheeling had violated

Section 10(b) of the Securities Exchange Act of 1934, and rule 10b-5a promulgated thereunder.

During the period of the initial informal investigation, there was considerable contact between the

SEC staff attorney conducting the investigation and the Senator’s office and with competitors of

Wheeling who were in alleged complicity with the Senator. The Senator was also actively

pursuing the passage of legislation that would prevent Wheeling from obtaining Federal loan

guarantees if it was under investigation by a Federal agency. Thereafter, the SEC ordered a formal

investigation of the matter. Pursuant to the formal investigation order, the SEC issued a subpoena

duces tecum to Wheeling and its chief executive officer. He refused to answer certain questions

and the agency sought enforcement. Wheeling defended on the grounds, inter alia, that the

subpoena was issued in bad faith and for the purpose of harassment; and that the investigation

constituted an abuse of the SEC’s investigatory power by competitors of Wheeling who were

opposed to the grant of certain Federal loan guarantees to Wheeling.

The district court refused to enforce the subpoena. Although it specifically rejected the claim of

bad faith on the part of the agency, it concluded that, “under the totality of circumstances,”

121

482 F. Supp 555 (W.D. Pa. 1979), vacated and remanded, 648 F.2d 118 (3d Cir. 1981)(en banc)(WheelingPittsburgh).

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enforcement would be an abuse of the court’s process.122 The court reached this conclusion

because it believed that the SEC had allowed biased third parties to improperly influence the

investigation process, although it conceded that the agency did not adopt the biased motives of

the third parties.123

A panel of the Third Circuit reversed, concluding that a court could not refuse to enforce

administrative subpoenas issued in good faith pursuit of a statutorily authorized purpose. The

court concluded that bias of third parties was irrelevant where the agency had proceeded in good

faith and that to invalidate agency action on the basis of an abuse of process theory independent

of the bad faith defense was improper.

The case was reargued before the Third Circuit en banc, which by a 6-4 vote remanded the case

to the district court in light of its ruling that even in the absence of bad faith on the part of an

agency, it would not enforce an administrative subpoena if it was issued because of congressional

influence and it was shown that the agency knew its process was being abused, that it knowingly

did nothing to prevent the abuse, and that it vigorously pursued the frivolous charges.124

We do not doubt the usefulness to administrative agencies of information gained from

third parties. Nor do we doubt that frequently the motivations of informants are less than

altruistic. See United States v. Cortese, 614 F.2d 914 (3d Cir. 1980). But we cannot simply

avert our eyes from the realities of the political world: members of Congress are requested

to, and do in fact, intrude, in varying degrees, in administrative proceedings. One

commentator has said recently of the Internal Revenue Service:

[A]though the IRS ultimately must be accountable to Congress, whose members are

in turn accountable to the people, the IRS also has a constitutional duty to execute

the tax law faithfully by determining and administering it properly. The IRS must

give congressional comments only as much deference as they deserve on the merits,

for the agency has no duty to placate particular congressmen or committees. Given

the fine line between lawmaking and law enforcement, it is always difficult to say

when one shades into the other, but clearly there is an inevitable tension between

congressional oversight powers and the executive exercise of delegated powers to

interpret, articulate, and execute the tax laws.

Parnell, Congressional Interference in Agency Enforcement: The IRS Experience, 89 Yale

L.J. 1360, 1368 (1980) (footnotes omitted). The duty of the SEC, therefore is not to ignore

information given to it by congressmen, but to “give congressional comments only as much

deference as they deserve on the merits.” Id. An administrative agency that undertakes an

extensive investigation at the insistence of a powerful United States Senator “with no

reasonable expectation” of proving a violation and then seeks federal court enforcement of

its subpoena could be found to be using the judiciary for illicit purposes. We need not lend

the process of the federal courts to aid such behavior.125

The appeals court made it clear that the bad faith defense need not be the sole basis for denial of

enforcement, and that agency acquiescence in an abuse of its own process may lead to a finding

of abuse of the court’s process. The court distinguished between the two, noting that “bad faith

122

482 F.Supp. 555, 567 (W.D. Pa. 1979).

482 F.Supp. at 565-66.

124

648 F.2d at 125.

125

Id. at 126 (footnotes omitted).

123

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connotes a conscious decision by an agency to pursue a groundless allegation,” while “an agency

may be found to be abusing the court’s process if it vigorously pursued a charge because of the

influence of a powerful third party without consciously and objectively evaluating the charge.”126

The court also emphasized the point that it was improper for the district court to have taken into

account the motivation of third parties in determining either bad faith or abuse of process. “This

court has previously made clear that the proper focus in a challenge to an administrative subpoena

is motivation of the agency itself, not that of third parties,” citing United States v. Cortese, 614

F.2d 914, 921 (3d Cir. 1980).127 The requirement of a finding of “institutional” bad faith rather

than that of an individual agent, or the refusal to allow attributing the motives of third parties to

an agency, is well established. 128

The court concluded:

At bottom, this case raises the question whether, based on objective factors, the SEC’s

decision to investigate reflected its independent determination, or whether that decision was

the product of external influences. The reality of prosecutorial experience, that most

investigations originate on the basis of tips, suggestions, or importunings of third parties,

including commercial competitors, need hardly be noted. That the SEC commenced these

proceedings as a result of the importunings of Senator Weicker or CF&I, even with malice

on their part, is not a sufficient basis to deny enforcement of the subpoenas. See Cortese, 614

F.2d at 921. But beginning an informal investigation by collecting facts at the request of a

third party, even one harboring ulterior motives is much different from entering an order

directing a private formal investigation pursuant to 17 C.F.R. § 202.5 (1980), without an

objective determination by the Commission and only because of political pressure. The

respondents are not free from an informal investigation instigated by anyone, in or out of

government. But they are entitled to a decision by the SEC itself, free from third-party

political pressure, that a “likelihood” of a violation exists and that a private investigation

should be ordered. See 17 C.F.R. § 205.2(a). The SEC order must be supported by an

independent agency determination, not one dictated or pressured by external forces. If an

allegation of improper influence and abdication of the agency’s objective responsibilities is

made, and supported by sufficient evidence to make it facially credible, respondents are

entitled to examine the circumstances surrounding the SEC’s private investigation order. The

court should be guided by twin beacons: the court’s process is focus of the judicial inquiry

and the respondent may challenge the summons on any appropriate ground.129

In sum, then, it would appear that the Third Circuit, while accepting the possibility of finding that

political pressure can taint an investigative proceeding under a variety of theories, has imposed on

a litigant the burden of establishing the factual predicate to support such a determination which

may prove quite formidable. It certainly appears no less an obstacle than the showing of actual

effect required in other non-adjudicatory situations.130

126

648 F.2d at 125 n. 9.

648 F.2d at 127.

128

United States v. LaSalle National Bank, 437 U.S. 298, 316 (1978); United States v. Target Advertising, Inc., 257

F.3d 348, 355 (4th Cir. 2001); Pickel v. United State, 746 F.2d 176, 184 (3d Cir. 1984); EEOC v. Michael Construction

Co., 706 F.2d 244, 251 n. 7 (8th Cir. 1983); NLRB v. Interstate Dress Carriers, Inc., 610 F.2d 99, 112 (3d Cir. 1979).

129

648 F.2d at 130.

127

130

See e.g., American Public Gas Association v. FPC, 567 F.2d 1016, 1070, (D.C. Cir. 1977), cert. denied 435 U.S.

907 (1978) (ratemaking); State of California v. FERC, 966 F.2d 1541 (9th Cir. 1992) (lengthy series of correspondence

between FERC and Chairman of Energy and Commerce Committee which resulted in agency (1) reopening a factfinding proceeding and (2) reversing a longstanding interpretation of its authority, held not undue congressional

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On the other hand, Wheeling-Pittsburgh represents something of a liberalization in an area where

court review of agency requests for enforcement of administrative subpoenas has traditionally

been severely circumscribed and narrow.131 Indeed, the development has been severely

criticized, 132 and some courts appear to have rejected Wheeling-Pittsburgh and are adhering to the

traditional standard of high deference to agency subpoena issuance decisions.133 In fact, it may be

that the somewhat more expansive review of such situations afforded by Wheeling-Pittsburgh

may be limited to cases arising in the Third Circuit.134 In any event, we are aware of no court that

has utilized the Wheeling-Pittsburgh standard to refuse to enforce an administrative subpoena

because of alleged undue congressional influence. Indeed, the Wheeling-Pittsburgh court itself

did not find that the SEC had been guilty of an abuse judicial process; it remanded the case to the

district court to make findings consonant with its opinion.

2. United States v. Armada Petroleum Corp.

Several courts have subsequently applied the Wheeling-Pittsburgh rationale in cases involving the

issuance of subpoenas by the Department of Energy to resellers of petroleum products who had

refused to voluntarily supply documents in the course of a valid agency audit. In each case the

defendant company claimed, inter alia, that the Chairman of the Oversight and Investigations

Subcommittee of the House Energy and Commerce Committee had exerted improper influence

on the agency official making the decision to issue the subpoena. In each instance the courts

rejected the claims.135 In United States v. Armada Petroleum Corp., for example, the court

acknowledged Wheeling-Pittsburgh’s holding that an agency may not order an investigation

“because of political pressure to do so,” but found that where, as in the case before it, “the

Congressional involvement is directed not at the agency’s decision on the merits but at

accelerating the disposition and enforcement of the pertinent regulations, it has been held that

such legislative conduct does not affect the fairness of the agency’s proceedings and does not

warrant setting aside its order.”136

(...continued)

influence because the agency made its decisions based upon “its own independent and detailed analysis of the

issue[s].”).

131

See e.g., United States v. LaSalle National Bank, 437 U.S. 298, 316-17 (1978); United States v. Morton Salt Co.,

338 U.S. 632, 652 (1950); City of Chicago v. United States, 396 U.S. 162, 165 (1969) (agency decisions to conduct

investigations are “committed entirely to agency discretion); Union Mechling Corp. v. United States, 566 F.2d 722,

724-25 (D.C. Cir. 1977), Dresser Industries Inc. v. United States, 596 F.2d 1231 1235 n. 1(5th Cir. 1979), cert. denied,

444 U.S. 1044 (1980).

132

See Comment, SEC v. Wheeling-Pittsburgh Steel Corp.: Bad Faith and Abuse-Of-Process Defense to

Administrative Subpoenas, 82 Colum.L.Rev. 811 (1982).

133

See e.g., United States v. Aero Mayflower Transit Co., 831 F.2d 1142, 1146-47 (D.C. Cir. 1987) (a court only has

discretion to conduct an evidentiary hearing in a subpoena enforcement case in the unlikely situation where the party

opposing the subpoena has presented affidavit evidence that the agency “is acting without authority or where its

purpose in harassment of citizens.”); United States v. Teeven, 745 F.Supp. 220, 224-227 (D. Del. 1990) (discussing

Aero and concluding that Wheeling-Pittsburgh is still controlling in Third Circuit).

134

See, United States v. Westinghouse Electric Corp., 788 F.2d 164, 166-67 (3d Cir. 1986)(citing Wheeling-Pittsburgh

approvingly); EEOC v. University of Pennsylvania, 850 F.2d 969, 980 (3d Cir. 1988) (expressly recognized continued

vitality of Wheeling-Pittsburgh on abuse of process issue), aff’d 493 U.S. 182 (1990).

135

United States v. FRB Petroleum, Inc., 703 F.2d 528, 532 (Em. Appeals 1983); United States v. Phoenix

Petroleum,571 F. Supp. 16 20 (S.D. Tex 1982); United States v. Armada Petroleum Corp., 562 F.Supp. 43, 50-51 (S.D.

Tex. 1982). See also, United States v. Merit Petroleum, Inc., 731 F.2d 901, 904 (Em. Appeals 1984).

136

See also, United States v. Hayes, 408 F.2d 932 (7th Cir.), cert. denied, 396 U.S. 835 (1969) (the fact that a House

Subcommittee had expressed an interest in an Internal Revenue Service investigation did not show that the

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3. United States v. American Target Advertising, Inc.

In the most recent decision in which the target of an administrative investigation invoked

Wheeling-Pittsburgh principles, the 4th Circuit, in United States v. American Target Advertising,

Inc.,137 rejected the claim of the defendant that the issuance of an investigative subpoena was a

tool of harassment and intimidation exercised by the agency (the Postal Service) at the behest of a

Senator who, the court conceded, “has demonstrated a fair degree of hostility toward” the

defendant. But the appeals court reiterated that that was not enough. The appellant “must show

that the party actually responsible for initiating the investigation, i.e., the Postal Service, has done

so in bad faith.”138 The court found no evidence of bad faith and rejected American Target’s

request for discovery before the district court, noting “that such discovery is prohibited in these

types of summary enforcement proceedings absent ‘extraordinary circumstances.’” The appeals

court advised that in order to obtain discovery, the target must distinguish himself “from the class

of the ordinary respondent, by citing special circumstances.”139 The 4th Circuit concluded that it

had not done so there, stating: “when presented with evidence of unlawful conduct, the

Government is not bound to investigate only those potential wrongdoers who support its policies.

Because American Target failed to distinguish itself from the ordinary disgruntled respondent, it

is not entitled to discovery regarding the genesis of the Postal Service’s inquiry.”140

In sum, it would appear that the assertions with respect to the Wheeling-Pittsburgh precedent is

unduly restrictive. That case does not establish an “appearance of partiality” standard with respect

to congressional contacts. A high degree of proof is needed to demonstrate that the agency’s

motivation in continuing an investigation is solely in acquiescence to congressional influence and

without any regard to the adequacy of the grounds of the allegations.

G. Summary and Conclusions

A review of the undue influence case law since 1966 indicates that the courts, in balancing

Congress’s performance of its constitutional and statutory obligations to oversee the actions of

agency officials against the rights of parties before agencies, have increasingly looked to the role

of the political process in all types of agency decisionmakings and have attempted to give weight

to that process on a case-by case basis. The result has been a strong predilection of the courts to

accept congressional prerogatives. Thus where informal rulemaking or other forms of informal

decisionmaking are involved, the courts will look to the nature and impact of the political

pressure on the agency decisionmaker and will intervene only where that pressure has had the

(...continued)

investigation was conducted for an improper purpose).

137

257 F.3d 348 (4th Cir. 2001).

138

257 F.3d at 355.

139

Id.

140

Id. at 356. For an instance in which a court found that a party alleging agency undue political influence on an agency

had made a sufficiently “strong showing” of improper influence to be entitled to extraordinary discovery and

examination of agency personnel, see Sokaogan Chippewa Community v. Babbitt, 961 F.Supp. 1276, 1280-86 (W.D.

Wisc. 1997). The court warned that plaintiffs still need “to show that the pressure was intended to and did cause the

Department of Interior’s actions to be influenced by factors not relevant under the controlling statute.” 961 F.Supp. at

1286. After the court’s ruling all proceedings in the matter were suspended during the pendency of an independent

counsel investigation. At the conclusion of that investigation the government and the tribes settled and the undue

influence issue was not pursued. See Sokaogon Chippewa Community v. Babbitt, 214 F.3d 941, 944-45 (7th Cir. 2000).

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actual effect of forcing the consideration of factors Congress did not intend to make relevant.

Where agency adjudication is involved a stricter standard is applied and the finding of an

appearance of impropriety can be sufficient to taint the proceeding. But even here the courts have

required that the pressure or influence be directed at the ultimate decisionmaker with respect to

the merits of the proceeding and that it does not involve legitimate oversight and investigative

functions before they will intervene. And where congressional intrusion in an agency’s

investigative process is involved the courts will intervene only if it is in fact shown that an

inquiry was instituted and subpoenas issued because of congressional influence, the agency knew

its process was being abused, that it knowingly did nothing to prevent abuse, and that it

rigorously pursued frivolous charges.

A 1989 legal commentary has severely criticized this decisional trend, arguing that the case law in

this area means that:

... Members of Congress can intervene in ongoing agency proceedings by contacting either

the close personal aides or the immediate superiors of the ultimate decisionmaker, convey

their judgments on how those questions should be decided and avoid judicial review of their

actions while knowing full well that their message will find its way to the relevant agency

official. In short, the actual influence standard of D.C. Federation is manipulable at the

whim of Congress and, in the words of Judge Gesell, those seeking to invoke the Pillsbury

doctrine must now “shoulder the virtually impossible burden of proving whether and in what

way ... the agency was actually influenced” by congressional intervention.141

As a remedy, the author calls for the judicial application of Pillsbury’s “appearance of

impartiality” standard to any instance of informal congressional intercession, regardless of the

nature of the proceeding in question, “as a legitimate and useful tool for controlling congressional

abuse of the informal oversight mechanisms which are likely to see wider use in the post-Chadha

era.”142 The comment suggests that the use of such informal oversight mechanisms is an unlawful

circumvention of the Supreme Court’s decision in INS v. Chadha,143 which invalidated the use of

legislative veto devices, because it allowed Congress to evade the presentment and bicameralism

requirements of the legislative process mandated by the Constitution. 144 “If Congress determines

through the use of oversight mechanisms that an agency has misinterpreted a statute, the

appropriate response is to take the formal step of amending the law, not to use informal means to

alter the agency’s interpretation.”145

The comment would appear to misconceive the nature and scope of Congress’ constitutional

oversight and investigatory authority and the judicial recognition and approbation of informal

congressional techniques to influence agency actions as both directly flowing from that authority

and as being an integral part of the checks and balances mechanism underlying our scheme of

separated but shared powers. Thus it is well settled that Congress in legislating pursuant to the

powers granted it under Article I, section 8 of the Constitution, has the authority, under the

Necessary and Proper Clause, Art. I, sec. 8, cl. 18, to create the bureaucratic infrastructure of the

141

Comment, Judicial Restriction on Improper Congressional Influence in Administrative Influence in Administrative

Decision-making: A Defense of the Pillsbury Doctine, 6 J. of Law & Politics 135, 154 (1989).

142

Id., 6 J. of Law and Politics at 1360-37.

143

462 U.S. 919 (1983).

144

Id. at 147.

145

Id. at 159.

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Executive branch and to determine the nature, scope, and power of the duties so created.146

Moreover, as a general matter, the Supreme Court has spoken very broadly of the legislative

power over offices. Where Congress deals with the structure of an office – its creation, location,

abolition, powers, duties, tenure, compensation and other such incidents – its power is virtually

plenary.147 Only where the object of the exercise of the power is clearly seen in the particular

situation as an attempt to effect an unconstitutional purpose, e.g., congressional appointment or

removal of an officer,148 have the courts felt constrained to intervene.

Equally well settled is the breadth of Congress’ authority to effectively monitor the work of its

creations. Supreme Court rulings have firmly established that the oversight and investigatory

power of Congress is so essential to the legislative function as to be implied from the general

vesting of legislative power in Congress.149 In the absence of a countervailing constitutional

privilege or a self-imposed statutory restriction upon its authority, the Congress (and its

committees) has plenary power to compel information needed to discharge its legislative function

from executive agencies, private persons, and organizations, and within certain constraints, the

information so obtained may be made public.150

Moreover, Congress’ power to influence executive and other governmental conduct is not

confined to its utilization of its lawmaking authority. The courts have long recognized

congressional authority to investigate, and to express its opinion, in an attempt to influence the

manner in which the laws are executed.151 In upholding the exercises of similar kinds of authority,

courts have acknowledged that the issuance of a subpoena to the executive,152 the mandate of a

report and wait provision,153 and the expression of disapprobation or the focusing of public

attention on executive action, 154 do not themselves constitute improper control of executive

decisionmaking. 155

The Supreme Court has also recognized Congress’ right to investigate the Government’s conduct

of civil and criminal litigation. In the leading case of McGrain v. Daugherty,156 the Senate had

appointed a select committee to investigate the alleged failure of the Justice Department to

prosecute and defend certain civil and criminal actions to which the government was a party. The

Supreme Court upheld the action of the Senate in citing the brother of the Attorney General for

contempt of Congress for failure to comply with a subpoena issued by the select committee. The

Court determined that the subject of the investigation–”whether the Attorney General and his

146

Buckley v. Valeo, 424 U.S. 1 (1976).

147

See, e.g., Crenshaw v. United States, 134 U.S. 99, 105-06 (1890); Morrison v. Olson, 487 U.S. 654 (1988);

Mistretta v. United States, 488 U.S. 361 (1989).

148

See Buckley v. Valeo, supra; Bowsher v. Synar, 478 U.S. 714 (1986).

149

Mc Grain v. Daugherty, 273 U.S. 135, 174-75 (1927); Watkins v. United States, 354 U.S. 178, 187 (1958); Eastland

v. United States Servicemen’s Fund, 421 U.S. 491, 504-05 (1975).

150

Id. See also Gravel v. United States, 408 U.S. 606, 625 (1973); Doe v. McMillan, 412 U.S. 306 (1973).

151

McGrain v. Daugherty, supra; Watkins v. United States, supra.

152

United States v. Nixon, 418 U.S. 683 (1974).

153

INS v. Chadha, 462 U.S. 919, 935 n. 9, citing Sibbach v. Wilson & Co., 312 U.S. 1 (1941).

154

Bowsher v. Merck & Co., 460 U.S. 824, 833 (1983); City of Alexandria v. United States, 737 F.2d 1022 (Fed. Cir.

1984).

155

See also, Ameron v. U.S. Corps of Engineers, 809 F.2d 979, 992-993, 995 (3d Cir. 1988), cert dismissed 109 S. Ct.

257 (1988).

156

273 U.S. 135 (1927).

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assistants were performing or neglecting their duties in respect of the institution and prosecution

of proceedings to punish crimes and enforce appropriate remedies against the wrongdoers”–was

clearly one on which legislation could be enacted and was within the jurisdiction of the Senate to

investigate.157

Additionally, the courts have explicitly held that agencies may not deny Congress access to

agency documents, even in situations where the inquiry may result in the exposure of criminal

corruption or maladministration by agency officials. As the Supreme Court has noted, “But surely

a congressional committee which is engaged in a legitimate legislative investigation need not

grind to a halt whenever responses to its inquiries might potentially be harmful to a witness in

some distinct proceeding . . . or when crime or wrongdoing is exposed.”158

Thus, the courts have recognized the potentially prejudicial effect congressional hearings can

have on pending cases. While not questioning the prerogatives of Congress with respect to

oversight and investigation, the cases pose a choice for the Congress: congressionally generated

publicity may result in harming the prosecutorial effort of the Executive; but access to

information under secure conditions can fulfill the congressional power of investigation and at the

same time need not be inconsistent with the authority of the Executive to pursue its case.

Nonetheless, it remains a choice that is solely within Congress’ discretion to make, irrespective of

the consequences.

The foregoing review of the case law concerning Congress’ oversight and investigatory authority

appears to abundantly demonstrate that the decisional law development in the area of undue

influence is hardly aberrational but is, rather, a subset, and therefore a mirror, of the broad

oversight power the courts have accorded Congress over Executive agencies generally. In all such

cases the courts balance Congress’ constitutional oversight and investigatory prerogatives against

the interests of the agencies or private parties involved. In a non-adjudicatory setting involving

general policymaking, it is hardly surprising that the congressional prerogatives are likely to be

weighed and found persuasive unless the subject matter implicates countervailing constitutional

privileges of the President or the pressure brought to bear results in a decision that ignores

applicable statutory considerations or procedures. Thus the Sierra Club court noted that a

rulemaking would be overturned because of congressional pressure only if two conditions were

met: first, if the content of the pressure was designed to force the decisionmaker to decide on the

basis of factors not made relevant by Congress in the applicable statute and, second, if the

decision was in fact affected by those extraneous considerations.159 The court explained its

rationale as follows: “We believe it entirely proper for Congressional representatives vigorously

to represent the interests of their constituents before administrative agencies engaged in informal,

general policy rulemaking, so long as individual Congressmen do not frustrate the intent of

Congress as a whole as expressed in statue, nor undermine applicable rules of procedure.”160

On the other hand, underlying the greater judicial sensitivity to public or secret (ex parte)

exertions of political pressure on an agency adjudication is the premise that such adjudications,

whether formal or informal, involve individual rights rather than issues of general policy, and thus

implicate constitutional due process values. Although due process does not generally require a

157

273 U.S. at 170, 177-78.

Hutcheson v. United States, 369 U.S. 599, 617 (1962).

159

Sierra Club v. Costle, supra, 657 F.2d at 409.

160

Id.

158

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full-scale judicial trial, informal adjudications must nonetheless conform to the “fundamental

notions of fairness implicit in due process.”161 Both public and secret congressional attempts to

influence agency decisionmaking may undermine the due process rights of parties to informal

adjudications in several respects. Where the contacts are unrevealed, parties to the adjudication

are deprived of notice and an opportunity to respond with relevant information, a violation of

fundamental canons of fairness.162 Moreover, whether overt or concealed, political pressure

compromises the appearance of impartiality and objectivity of the decisionmaker, qualities

traditionally regarded as essential to due process. 163 Thus the decisions in this area reflect a

common purpose of the courts “to preserve the integrity of the judicial aspect of the

administrative process.”164

But even in the adjudicatory setting the judicial deference to congressional prerogatives is

apparent. Taint will not be found unless the pressure is directly on the decisionmaker, concerns

the merits of the case, and is not minimal. The Gulf Oil165 MEUA,166 California v. FERC167 and

ATX168 litigations serve to illustrate the current judicial practice. All four cases involved

proceedings adjudicatory in nature but in none was taint found. In Gulf Oil the court found the

following factors determinative: the subcommittee interrogations were not concerned with the

merits of the agency’s decision but with its compliance procedures; there was no attempt to

influence a factual determination of the agency; the Commission in fact resisted the political

pressure as evidenced by its resolution of key issues in a manner identical to the way it had

decided them before the committee hearings; and the fact that the nature of the agency’s decision

was entirely legal. In the MEUA case, the Second Circuit found the ex parte communications

involved there to be de minimis. The challenged communications were not secret and were in fact

promptly placed in the public record; they contained no new factual information; and no

opportunity for rebuttal was either required or necessary. In California v. FERC the court

emphasized that the congressional intercessions were meant to correct procedural problems and to

question whether the agency was applying the proper legal standard and that the agency

determination made in each instance was based on its own independent, on-the-record analysis of

the congressional objections and was accompanied by a reasoned explanation. The court viewed

the matter as properly involving the congressional interest in policymaking and policy

application. Finally, the intense congressional pressure in ATX to deny an application to operate a

new airline was found not to taint the proceeding because close examination showed that it did

not affect the outcome of proceeding. The court pointed to the absence of threats, the insulation of

the immediate decisionmaker, and that the findings of material facts were very well supported by

the evidentiary record, including the extensive evidence of previous wrongdoing and

161

Home Box Office, Inc. v. FCC, 567 F.2d 9, 56 (D.C. Cir 1977), cert denied, 434 U.S. 829 (1978). (Ex parte contacts

by private interests and Members of Congress tainted a rulemaking involving conflicting claims to private rights).

162

Morgan v. U.S., 301 U.S. 11, 18 (1938) (“The right to a hearing embraces not only the right to present evidence but

also a reasonable opportunity to know the claims of the opposing party and to meet them. The right to submit

arguments implies that opportunity; otherwise the right may be a barren one.”); Sangamon Valley Television Corp. v.

U.S., 269 F. 2d 221, 224 (D.C. Cir. 1959); U.S. Lines v. FMC, 584 F.2d 163, 169-70 (D.C. Cir. 1983).

163

Pillsbury, Co. v. FTC, 354 F.2d 952, 964 (5th Cir. 1966); Peter Kiewet Sons’ Co. v. U.S. Army Corps of Engineers,

714 F.2d 163, 169-70 (D.C. Cir. 1983).

164

Pillsbury Co. v. FTC, supra, 354 F.2d at 964.

165

Supra notes 56-60 and accompanying text.

166

Supra notes 64-65 and accompanying text.

167

Supra notes 66-72 and accompanying text.

168

Supra notes 73-81 and accompanying text.

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maladministration by the applicant. In short, the courts are looking to see if the agency itself

protected the integrity of its own decisional process.

Gulf Oil, MEUA, FERC and ATX then may be said to be reflective of the marked preference of

the courts for upholding agency action wherever it is on the decisionmaking continuum. It would

appear that unless a decisionmaker in an adjudication is directly contacted with respect to the

merits of the case before him, or the situation involves particularly outrageous and/or pervasive

congressional interference in a rulemaking, informal decisionmaking or investigative context

which actually influences the decisionmaker, it is unlikely that a court will void a challenged

agency action. Indeed, since the Pillsbury decision in 1966, only one challenge based on

adjudicatory interference has been successful (Koniag v. Andrus) and that turned on the fact of a

direct communication by letter to the agency decisionmaker by the chairman of a congressional

committee which pointedly addressed the merits of the pending proceeding. Similarly, only one

rulemaking has been found tainted during that same period (Texas Medical Association v.

Mathews). And in all instances in which a proceeding has been found tainted, the judicial remedy

has been a remand to the agency for reconsideration of the decision in question.

In the final analysis, judicial deference in this area appears to reflect the pragmatic conclusion

that maintenance of Congress’ ability to communicate as freely as possible with the

administrative bureaucracy is essential to sustaining the public acceptability of the modern

administrative state. As one commentator has explained:

The legitimacy and acceptability of the administrative process depends on the perception

of the public that the legislature has some sort of ultimate control over the agencies. It is

through the Congress that the administrative system is accountable to the public. If members

of Congress “be corrupt, others may be chosen.” The public may not, however, directly

remove agency officials. The public looks to its power to elect representatives as its input

into the administrative process. The public will perceive restrictions on Congress’s power to

influence agency action as reducing the accountability of agency officials. This will

negatively affect the legitimacy of agency actions, as well as seriously erode notion of

popular sovereignty. Even administrators, who may not perceive legislative intrusions into

the administrative process as being particularly desirable, recognize congressional

supervision as a necessary function in a democratic society. The nature of the government

requires that the legislature maintain a careful supervision over agency action.169

III. Ethical Standards and Considerations

This part of the report discusses the ethical considerations and issues which may arise when a

congressional office or a Member of Congress contacts an administrative or regulatory agency or

otherwise intervenes in an administrative matter on behalf of a private constituent or other private

entity with interests affecting the Member’s constituency.

Any discussion of the “ethics” of a Member of Congress intervening in an administrative matter

on behalf of a constituent or other individual must be set within the context of the traditional role

of a Member of Congress, in which the Member is often seen as his or her constituents’ most

immediate elected “representative” to the entire United States Government. Contacting an agency,

169

Comment, Judicial Limitation of Congressional Influence on Administrative Agencies, 73 Northwestern L. Rev.

931, 941 (1979)(footnotes omitted).

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department or Government bureau, and representing or intervening in administrative matters on

behalf of constituents have often been characterized as among the official responsibilities of

Members of Congress on behalf of those whom they represent, and such “representational”

duties, above and beyond purely “legislative” acts, have evolved as a traditional and longstanding

discretionary practice of Members of Congress.

In discussing the theoretical, as well as the ethical context for these representational activities, the

late Senator Paul Douglas of Illinois, in his valued work Ethics in Government, noted that

congressional intervention in the administrative and executive process is grounded firmly in our

concepts of checks and balances in a representative democracy, as well as our natural and

historical distrust, as a nation, of unelected governments:

Much of the mail and time of members of Congress is devoted to the requests of

constituents about matters concerning which they, the constituents, are dealing with the

administrative agencies of the government. In countries dominated by civil servants, such as

imperial Germany and to a lesser degree Great Britain, any intervention by legislators in such

administrative matters is severely discouraged. The bureaucracy in these countries contends

that the function of the legislators is to make the laws and that of the public administrators is

to administer them, and that consequently neither should interfere with the work of the other.

... These men, consciously or unconsciously, regard the civil service officials as devoted

public servants ... [in contrast to] the “impure” legislator .... [Such attitude] is fostered by

those who would create an “administrative state” in which the real directing power would be

exercised by self-selecting and self-perpetuating group of officials rather than by elected

representatives of the people. At its roots there is a concealed but deep distrust of democratic

government and democratic processes.

***

The truth is that legislation and administration should not be kept in air-tight and

separate compartments. In order that each group may perform its own job adequately, it

should within limits interest itself in the work of the other. There is then, a sound ethical

basis for legislators to represent the interests of constituents and other citizens in their

dealings with administrative officials and bodies.

Besides this ethical justification, there is a practical necessity for it. Out of a deep

instinctive wisdom, the American people have never been willing to confide their individual

or collective destinies to civil servants over whom they have little control. They distrust and

dislike a self-perpetuating bureaucracy, because they believe that ultimately it will not reflect

the best interests of the people. They therefore turn to their elected representatives to protect

their legitimate interests in their relationship with the public administrators.170

The importance of the case-work or service function of representing constituents’ individual

interests before the agencies and officials of the federal executive bureaucracy was recognized

and discussed in an important treatise on congressional ethics authored by the Association of the

Bar of the City of New York, Congress and the Public Trust:

The casework or service function has become a major responsibility of Members of

Congress today. In the performance of this function, a Senator or Representative negotiates

170

Douglas, Paul H., Ethics in Government, at 85-88 (Cambridge 1952); see also discussion in Senate Committee Print,

“Ethical Standards in Government,” Report of a Subcommittee of the Committee on Labor and Public Welfare, 82d

Cong., 1st Sess. 28-30 (1951).

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in his constituent’s behalf a whole range of problems and difficulties that arise out of their

relations with the Federal government. This can involve the Member in helping to obtain a

federal contract for his district, interceding on behalf of a selective service registrant,

inquiring why a constituent’s Social Security check has not been delivered, setting up a

meeting with a Federal official, and arranging for a tour of the White House for an important

constituent.171

The practice of intervening in administrative and executive matters on behalf of constituents and

other individuals has, therefore, not been perceived historically in the United States as an

inherently wrongful act, necessarily involving undue or improper “political” influence over

executive or administrative matters, but rather has customarily been seen as a discretionary, and

arguably, an expected function of one’s representative in Congress. The House Committee on

Standards of Official Conduct, for example, advises Members and employees of the House that:

“An important aspect of a House Member’s representative function is to act as a ‘go-between’ or

conduit between his constituents and administrative agencies of the Federal Government.”172

Similarly, the Senate Select Committee on Ethics has stated that: “It is a necessary function of a

Senator’s office to intervene with officials of the executive branch and independent regulatory

agencies on behalf of individuals when the facts warrant ....”173

There are, of course, opportunities and potential for abuse in this area, and there are, therefore,

statutory as well as ethical restraints and considerations in relation to such activities, as there are

for most official activities and duties of Members of Congress and their staff. The most prominent

and clear restriction is upon the receipt of compensation or anything of value in return for, or

because of, such representational activity.

The Supreme Court of the United States in 1905 had occasion to rule on the propriety of a United

States Senator intervening in an executive matter, and noted that such activity, although not

required of a Member, is within the Member’s discretion, may be done “without impropriety,”

and is not violative of statutory restraints as long as no compensation is accepted for the activity.

The Court in Burton v. United States, in ruling that a statute barring a Senator from receiving

compensation for representing an individual before the agencies of the Government did not

unduly interfere with a Member’s constitutional duties to represent and present his views before

those agencies, explained:

A statute like the one before us ... can be executed without in any degree ... interfering with

the discharge of the legitimate duties of a Senator. The proper discharge of those duties does

not require a Senator to appear before an executive Department in order to enforce his

particular views, or the views of others, in respect of matters committed to that Department

for determination. He may often do so without impropriety, and, as far as existing law is

concerned, may do so whenever he chooses, provided he neither agrees to receive nor

receives compensation for such services.174

171

Association of the Bar of the City of New York, Special Committee on Congressional Ethics, Congress and the

Public Trust, at 10 (New York 1970).

172

Ethics Manual for Members, Officers, and Employees of the U.S. House of Representatives, Committee on

Standards of Official Conduct, 102nd Cong., 2d Sess. 241 (1993).

173

S. Rpt. No. 102-223, 102d Cong., 1st Sess., Investigation of Senator Alan Cranston, at 14 (1991).

174

202 U.S. 344, 367 (1905).

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The initial ethical considerations thus concern the receipt of things of value by a Member or staff

from persons or organizations on whose behalf interventions before or inquiries to federal

agencies were made. Prudence and caution must, of course, be exercised by Members of

Congress and staff in accepting gifts at any time from private individuals or groups, and even

more so in accepting any gifts, offers of entertainment, or other things of value which could be

interpreted as a reward, payment or additional compensation for doing one’s official duties in

assisting constituents or others in matters before federal agencies. Since campaign contributions

are a more common, and arguably a more acceptable and necessary monetary transfer from

private individuals to Members of Congress than are outright gifts, some of the more common,

but difficult questions in this area concern the receipt, acceptance, or solicitation of campaign

contributions from those whom the Member or his or her staff has assisted in matters before

federal agencies.

In addition to statutory and rule restrictions relating to such things as the receipt of payments or

gifts in return for representational activity, or concerning a Member’s or staff’s own personal

interest in a matter, there are also general ethical considerations and guidelines which are

concerned with the prevention of undue or improper influence by those in the legislative branch

over the duties and functions of executive officers and employees, separate from the issue of

compensation or reward. These considerations and guidelines are based in some respects on the

separation of powers doctrine, as well as on the notions of due process and fairness in

administrative proceedings, and the issues of the use or abuse of political influence over matters

which are expected to be based substantially on competitive, merit principles, or which are to be

decided strictly on particular statutory or regulatory criteria.175 Executive or administrative

decisions on some matters, such as certain federal contracts or hiring in the civil service, are often

expressly required to be made on a competitive, merit basis, and may be expressly required not to

be made on the basis of political affiliation or influence.

A. House and Senate Guidelines

1. Opinion of the House Committee on Standards of Official Conduct

The House Committee on Standards of Official Conduct in 1973 incorporated several generally

accepted ethical standards and principles into an advisory opinion on Members’ offices dealing

with the administrative agencies of the Federal Government. Advisory Opinion No. 1, “On the

Role of a Member of the House of Representatives in Communicating With Executive and

Independent Agencies,” provides, in part, as follows:

REPRESENTATIONS

This Committee is of the opinion that a Member of the House of Representatives, either

on his own initiative or at the request of a petitioner, may properly communicate with an

Executive or Independent agency on any matter to:

Request information or a status report;

Urge prompt consideration;

175

Federal case law concerning notions of due process and unfair congressional or “political” interference in

administrative matters are discussed in Part II of this report.

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Arrange for interviews or appointments;

Express judgment;

Call for reconsideration of an administrative response which he believes is not

supported by established law, Federal Regulation, or legislative intent;

Perform any other service of a similar nature in this area compatible with the

criteria hereinafter expressed in this Advisory Opinion.

PRINCIPLES TO BE OBSERVED

The overall public interest, naturally, is primary to any individual matter and should be

so considered. There are also other self-evident standards of official conduct which Members

should uphold with regard to these communications. The Committee believes the following

to be basic:

1. A Member’s responsibility in this area is to all his constituents equally and should be

pursued with diligence irrespective of political or other considerations.

2. Direct or implied suggestion of either favoritism or reprisal in advance of, or

subsequent to, action taken by the agency contacted is unwarranted abuse of the

representative role.

3. A Member should make every effort to assure that representations made in his name

by any staff employee conform to his instruction.

2. Senate Rule on Intervention

The Senate adopted in 1992 a specific Senate Rule dealing with constituent service and

intervention into administrative matters. This Rule was adopted after the Senate Select

Committee on Ethics conducted disciplinary proceedings concerning five Senators and their

personal interventions into executive branch investigations of failed savings and loan institutions.

The Senate Rule, at Rule 43, provides:

CONSTITUENT SERVICE

1. In responding to petitions for assistance, a Member of the Senate, acting directly or

through employees, has the right to assist petitioners before executive and independent

government officials and agencies.

2. At the request of a petitioner, a Member of the Senate, or a Senate employee, may

communicate with an executive or independent government official or agency on any matter

to:

(a) request information or a status report;

(b) urge prompt consideration;

(d) express judgments;

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(e) call for reconsideration of an administrative response which the Member

believes is not reasonable supported by statutes, regulations or considerations of

equity or public policy; or

(f) perform any other service of a similar nature consistent with the provisions of

this rule.

3. The decision to provide assistance to petitioners may not be made on the basis of

contributions or services, or promises of contributions or services, to the Member’s political

campaigns or to other organizations in which the Member has a political, personal, or

financial interest.

4. A Member shall make a reasonable effort to assure that representations made in the

Member’s name by any Senate employee are accurate and conform to the Member’s

instructions and to this rule.

5. Nothing in this rule shall be construed to limit the authority of Members, and Senate

employees, to perform legislative, including committee, responsibilities.

B. Intervention and Receipt of Things of Value

One of the more fundamental ethical concerns and direct prohibitions concerning administrative

intervention, or any other “casework” function by a congressional office, relates to the receipt of

things of value in connection with such services. Depending on the circumstances of the receipt

of money, gifts or contributions, and the “nexus” of such items of value to the services performed

or agreed to be performed by a Member or staff, such conduct may implicate various criminal

laws as well as ethical rules and guidelines.

1. Bribery

The federal bribery law at 18 U.S.C. §201 provides criminal penalties for any public official who

“corruptly” seeks, accepts, or agrees to receive anything of value “personally or for any other

person or entity, in return for being influenced in the performance of any official act ....”176 Within

the bribery statute is also the so-called “illegal gratuities” clause, discussed below, which

penalizes a public official who, other than as provided by law, agrees to accept anything of value

personally “for or because of” any official act performed or to be performed. 177

The bribery provision of federal law requires in the first place that “anything of value” be

corruptly sought or received in return for being influenced in an official act. The term “anything

of value” is interpreted broadly, and could include cash, gifts, discounts, or even campaign

contributions, “because the words ‘anything of value’ comprehend anything that conceivably can

be offered or given as a bribe.”178

176

18 U.S.C. § 201(b)(2)(A).

18 U.S.C. § 201(c)(1)(B).

178

H.R. Rpt. No. 748, 87th Cong., 1st Sess. 18 (1961), to accompany H.R. 8140, the major revision and recodificat

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